REDUCING 


COST  OF  LIVING 


Reducing  the  Cost  of  Living 


BOOKS  BY  THE  AUTHOR 


"  WAGES  IN  THE  UNITED  STATES." 

"  FINANCING  THE  WAGE  EARNER'S  FAMILY." 

"  SOCIAL  ADJUSTMENT." 

"  THE  SOLUTION  OF  THE  CHILD  LABOR  PROBLEM." 

"  THE  SUPER  RACE." 

"  SOCIAL  SANITY." 

"  WOMAN  AND  SOCIAL  PROGRESS." 

/In  collaboration  with  \ 
^Nellie  M.  S.  Nearinf  J 


Reducing 

the 

Cost  of  Living 

By 
SCOTT  NEARING,  Ph.D. 

Wharton  School  of    Finance  and  Commerce 
University  of  Pennsylvania 


PHILADELPHIA 

GEORGE  W.  JACOBS  &  CO. 
PUBLISHERS 


HP 


/Vf 


Copyright,  1914,  by 

GEORGE  W.  JACOBS  &  COMPANY 

Published  July,  1914 


All  rights  reserved 
Printed  in  U.  S.  A. 


A    MESSAGE 

To  the  multitude  of  those  who  are  grappling 
for  existence  ; 

To  the  well-to-do,  struggling  for  supremacy  ; 

To  the  scattering  spectators  who  surround 
the  economic  arena  ; 

and 

To  posterity  which  waits  expectant  on  the 
outcome  of  the  conflict 


Preface 

WITH  impertinent  regularity,  economic  and  social 
questions  present  themselves  for  solution.  At  one  time 
the  central  figure  in  the  tangled  mass  of  issues  that 
loom  before  society  is  slavery  ;  at  another  time  it  is 
universal  education.  Each  issue,  as  it  appears  across 
the  path  of  progress,  must  be  met  and  mastered  before 
civilization  can  resume  its  course. 

When  the  twentieth  century  dawned  the  Western 
World  was  confronted  with  two  portentous  problems. 
One  of  these  problems  involves  the  relation  between 
private  and  social  property ;  the  other  involves  the 
cost  of  living. 

The  cost  of  living  issue  is  intimately  related  to  the 
controversy  over  the  rights  of  private  and  social  prop- 
erty. The  two  problems  are  not  inseparable,  however. 
Indeed,  in  many  of  the  phases  they  are  sharply  dis- 
tinguished. Neither  question  can  be  ignored.  America 
is  a  land  of  justice ;  yet  blatant  wrongs  challenge  the 
attention  of  the  most  superficial  observer.  America 
is  a  land  of  equality  ;  yet  the  present  generation 
enters  upon  a  life  arena  of  inequalities  such  as  the 
world  has  seldom  seen.  America  is  a  land  of  plenty, 
but  rising  prices  spread  hardship  and  misery. 

The  questions  involved  in  the  high  cost  of  living 
are  menacing  in  some  of  their  aspects.  The  obstacles 


8  PREFACE 

which  they  present  are  not  insuperable,  however.  The 
outlook  is  hopeful ;  there  is  ample  room  for  optimism  ; 
yet  the  time  has  come  when  both  hope  and  optimism 
must  culminate  in  decisive  action. 


Contents 

INTRODUCTION      ...  .         .       13 

PART  I 
A  STATEMENT  OF  THE  ISSUE 

I.     THE  COST  OF  LIVING  AS  A  POLITICAL  ISSUE       .       23 
II.     THE  COST  OF  LIVING  AS  A  SOCIAL  PROBLEM      .       3 1 

PART  II 
THE  CHANGING  FORM  OF  "  LIVING  " 

III.  THE  CHANGING  FORM  OF  AMERICAN  LIFE         .       41 

IV.  THE  INCREASING  DEMAND  FOR  SERVICES    .         .       52 
V.     THE    INCREASING    USE    OF    COMFORTS    AND 

LUXURIES  .         .         .  ,      .         .       67 

VI.     THE  ASCENDING  SCALE  OF  NECESSARIES  OF  LIFE       79 

VII.     GETTING  AHEAD  .  .         .         .92 

PART  HI 

THE  CHANGING  PRICES  OF  COMMODITIES 
VIII.     PRICE  CHANGES  IN  THE  NECESSARIES  OF  LIFE     .      103 
IX.     THE  CAUSES  OF  ADVANCING  PRICES          .         .     116 
X.     THE  FOOD  SUPPLY  AND  THE  INCREASING  POPU- 
LATION       .         .         .         .         .         .124 

XI.     THE  INCREASING  GOLD  SUPPLY       .         .         .136 
XII.     INDUSTRIAL  COMBINATION  AND  MONOPOLY  AND 

THE  COST  OF  LIVING     .         .         .         .     155 

XIII.     THE  INCREASE  IN  THE  COST  OF  RAW  MATERIALS     165 


10 


CONTENTS 


XIV.     THE  INCREASE  IN  LAND  VALUES      .         .         .176 
XV.     THE  INCREASE  IN  LABOR  COSTS       .         .         .      193 

PART  IV 

REMEDIAL   MEASURES— A  PROGRAM 
XVI.     FACING  THE  ISSUE          .         .         .         .         .201 

XVII.     THE  SIMPLE  LIFE          .....     209 

XVIII.      BACK  TO  THE  LAND       .          .          .         .         .217 

XIX.     SOCIAL  EDUCATION        .....     228 

XX.     INCREASING    THE     EFFICIENCY    OF    FOOD    DIS- 
TRIBUTION   ......     240 

XXI.     CONSERVATION  AS  A  MEANS   OF  REDUCING  THE 

COST  OF  LIVING    .....     248 

XXII.     INCREASING  THE  EFFICIENCY  OF  LABOR     .          .     259 

XXIII.  INCREASING  THE  EFFICIENCY  OF  EXCHANGE          .     267 

XXIV.  THE    REDUCTION    AND  ELIMINATION  OF  MON- 

OPOLY PROFITS     .....     277 

XXV.     READJUSTED  TAXATION  ....     289 

XXVI.     THE  OUTLOOK 295 


Appendices 


APPENDIX  A.     STATISTICS  OF  THE  PRODUCTION  OF  NECES- 
SARIES AND  LUXURIES         .....     305 

(a)     Statistics  of  Certain  Industries  which  Produce 

Goods  Ordinarily  Classed   as  Comforts  and 

Luxuries,  1909. 
(3)     Statistics  of  Certain  Industries  which  Produce 

Goods   Ordinarily  Classed   as  Necessaries, 

1909. 

APPENDIX  B.     CHANGES  IN  FOOD  PRICES        ,          .          .      308 
(a)     Relative   Retail  Prices  of  Food,    1890-1913, 
as  Reported  by  the  United  States  Bureau  of 
Labor. 

(6)     Cost  of  Living  in  New  Jersey, — Comparison 
of  Average  Retail  Prices,  1898-1913. 

APPENDIX  C.     MOVEMENT  OF  FOOD  PRICES  AND  OF  EARN- 
INGS IN  NEW  JERSEY,  1898-1912        .          .  313 

APPENDIX  D.      VARIATION  IN  THE  COST  OF  LIVING  FOR 

SIXTY-SIX  NEW  JERSEY  TOWNS,  1912         .         .     316 

APPENDIX  E.     PER  CENT  OF  TOTAL  FOOD  EXPENDITURES 

FOR  VARIOUS  KINDS  OF  FOOD,  BY  INCOME    .          .     319 

APPENDIX  F.     ITEMIZED  COST  OF  PRODUCTION  FOR  PAPER 

PULP  AND  NEWS-PRINT  PAPER   .          .          .          .320 

(a)  Itemized  Cost  of  Production  per  Ton  of  Sul- 

phite Pulp,  by  Years,  1901-1909. 

(b)  Itemized  Cost  of  Production  per  Ton  of  News- 

print Paper,  by  Years,  1900-1909. 
(f)     Itemized  Cost  of  Production  of  Ground  Wood 
Pulp,  by  Years,  1900-1909. 


12  APPENDICES 


APPENDIX  G.     INCREASE  IN  THE  TOTAL  POPULATION  OF 

THE  UNITED  STATES  BY  DECADES,  1790-1910      .     316 

APPENDIX  H.  COMPARISON  BETWEEN  THE  STOCK  OF 
GOLD  ;  THE  NOTES  IN  CIRCULATION,  AND  LOANS 
AND  DISCOUNTS,  1889  TO  1910  .  .  .327 

(a)     Gold  Stock. 

(&)     Notes  in  Circulation. 

(f)     Loans  and  Discounts. 

APPENDIX  I.     ANNUAL    OUTPUT    OF    GOLD    AND   THE 

PRICE  INDEX  NUMBER,  1850—1912    .         .         .     328 

APPENDIX}.     FARM  VALUES,  1900  TO  1910          .         .     330 
(a)     Total  Farm  Values,  1900-1910. 
(6)     Increase  in  Land  Values,  1900-1910. 

APPENDIX  K.  INCREASE  IN  THE  LAND  VALUE  (ASSESSED 
SEPARATELY  FROM  IMPROVEMENTS)  IN  CERTAIN 
CITIES  ........  332 

(a)     New  York. 

(J)     Three  Eastern  Cities. 

(c)     Three  Western  Cities. 

APPENDIX  L.  AVERAGE  WAGE  RATES  PER  MONTH  FOR 
OUTDOOR  FARM  LABOR,  HIRED  BY  THE  YEAR, 
WITHOUT  BOARD,  1866  TO  1909  .  .  .  334 

INDEX      . 335 


Introduction 

THE  cost  of  living  has  been  discussed  in  such  a 
multitude  of  forms  that  any  addition  to  the  literature 
would  be  superfluous,  were  it  not  for  the  fact  that  few 
attempts  have  been  made  to  treat  the  subject  generally. 
Specific  instances  of  increasing  living  costs,  and  ab- 
stract theories  of  causes  have  appeared  in  abundance, 
together  with  many  suggestions  for  remedies.  There 
seems  to  be  lacking  any  unified  statement  covering 
these  various  fields. 

The  question  is  not  without  importance,  however. 
Indeed,  there  is  no  economic  topic  which,  at  the  pres- 
ent moment,  is  absorbing  a  larger  share  of  public 
attention.  Prices  have  been  rising  almost  steadily  for 
eighteen  years.  On  every  hand  there  are  indications 
that  the  rise  will  continue  for  an  indeterminate  length 
of  time.  Since  the  bulk  of  wages  shows  no  such  alac- 
rity, vast  numbers  of  wage- earners  are  menaced  by  a 
dwindling  subsistence. 

Action  without  thought  is  as  bootless  as  thought 
without  action.  In  some  cases  it  may  be  even  more 
disastrous.  If  the  problem  of  the  increasing  cost  of 
living  is  to  be  dealt  with  intelligently,  it  must  first 
yield  itself  to  a  careful  examination.  The  facts  in  the 
case  must  be  analyzed  and  stated.  Only  after  the 
matter  has  been  looked  at  from  all  possible  angles, 
should  a  course  of  action  be  decided  upon. 

Additional  weight  is  lent  to  the  cost  of  living  prob- 


14  INTRODUCTION 

lem  by  the  prominence  which  it  has  attained  in  recent 
political  discussions.  Peculiarly  aggravating  in  char- 
acter, and  intricate  to  the  last  degree,  the  topic  has 
not  been  made  a  political  issue  by  the  free  choice  of 
political  leaders.  Instead,  it  has  forced  itself  into 
political  prominence  by  its  sheer  bulk  and  momentum. 

Thus  far  party  declaration  and  attempted  fulfilment 
have  alike  proved  futile.  The  cost  of  living  continues 
to  rise.  Before  further  regulative  attempts  are  made 
and  further  blunders  perpetrated,  it  seems  wise  to  seek 
out  the  line  along  which  a  sane  solution  lies.  What 
are  the  facts t  What  is  their  import!  Should  this 
book  proceed  but  a  little  way  toward  the  answer  to 
some  of  the  vexing  questions  involved  in  the  cost  of 
living  discussions,  it  will  have  fulfilled  its  purpose. 
In  the  final  analysis,  no  solution  will  be  efficacious  that 
does  not  carry  with  it  the  reasoning  approval  of  the 
thoughtful  men  and  women  of  the  community. 

The  investigation  which  formed  the  basis  for  this 
book  was  intended  as  a  scientific  study  of  one  of  the 
imperative  economic  questions  of  the  day.  There  is 
in  the  work  no  attempt  to  substantiate  preconceived 
theories  or  to  uphold  catch  words  of  reform.  The 
conclusions  reached  bear  no  stamp  of  finality.  Neither 
the  first  word  nor  the  last  word  on  the  subject  is  here 
set  down.  Eather  the  book  contains,  first  of  all,  a 
summary  of  the  important  facts  bearing  on  the  cost 
of  living ;  second,  an  interrelation  of  these  facts ;  and 
third,  a  series  of  suggestions  regarding  the  lines  along 
which  any  sane  solution  of  the  issues  at  stake  must 
proceed. 

For  the  convenience  of  those  readers  who  wish  to 


INTRODUCTION  15 

get  the  general  line  of  thought  underlying  the  book 
before  beginning  their  reading  of  it,  the  following 
brief  summary  is  presented  : 

A  SUMMARY  OF  THE  ARGUMENT 
At  the  last  national  election  the  increasing  cost  of 
living  was  a  leading  issue  in  each  of  the  major  party 

platforms.    The  Democratic  platform  was 
PART  I 
Cha  ter  1         particularly  insistent  upon  the  ability  of 

the  Democratic  party  to  reduce  living 
costs  by  lowering  the  tariff  and  curbing  the  trusts. 
As  individual  issues  are  sifted,  it  becomes  more  evi- 
dent that  the  public  estimate  of  Democratic  achieve- 
ment must  depend  upon  the  results  of  Democratic 
handling  of  this  particular  issue.  Higher  living  costs 
will  prove  an  almost  insurmountable  barrier  to  Demo- 
cratic success  in  1916.  Lower  living  costs,  on  the 
other  hand,  will  go  far  toward  another  Democratic 
victory.  The  issue  is  now  before  the  country, — an 
issue  of  immense  significance, — "Have  the  Democrats 
sensed  accurately  and  gauged  wisely  the  forces  which 
are  responsible  for  the  high  cost  of  living!" 

"Living"  is  a  term  that  conveys  different  ideas 
to  different  people,  because  each  group  of  people  has 

_.     .     „        its  own  standard  of  living.     When  the 
Chapter  II 

standard  has  once  been  set,  the  people 

living  in  the  group  must  keep  to  it  or  be  unhappy. 
The  standard  may  begin  with  corn-pone  or  a  baby- 
grand  piano  ;  in  any  case  it  must  be  maintained. 

The  cost  of  living  problem  really  involves  two  dis- 
tinct issues.  One  is  the  issue  that  confronts  the  well- 
to-do  ;  the  other  the  issue  that  confronts  the  family  of 


16  INTEODUCTION 

low  income.  The  well-to-do  family  asks  anxiously 
whether  it  can  afford  this  comfort  or  that  one,  always 
taking  for  granted  that  the  bare  necessaries  of  life  will 
be  forthcoming.  The  family  under  a  thousand  dollars 
a  year  is  dealing  with  the  necessaries  of  life.  Such 
families  have  comforts,  to  be  sure  ;  but  their  primary 
interest  is  in  the  necessaries. 

Families  with  large,  and  families  with  small  in- 
comes are  alike  affected  by  the  change  in  the  ways 

of  living.     The  inventions  and  discov- 
PART  II 

Chapter  III       er*es  wni°^  *e(l  to  the  use  of  the  steam 

engine,  the  power-driven  machine,  and 

the  factory,  took  people  from  home  industry  to  factory 

industry,  from  simple  village  life  to  the  complex  city 

life. 

The  growth  of  town  and  city  life  led  to  an  increased 
dependence  upon  services.     The  village  dweller  could 

serve  himself.     The  city  dweller,  partly 
Chapter  IV  *.u         11  * 

from  necessity,  and  among  the  well-to-do, 

partly  from  choice,  turned  expectantly  to  public  and 
domestic  servants,  asking  them  to  render  assistance  in 
making  living  easier. 

Side  by  side  with  the  increased  demand  for  services 
there  has  gone  an  increase  in  the  number  and  variety 

of  luxuries  which  the  middle  class  enjoys. 

Among  the  well-to-do,  luxuries  of  food, 
of  clothing,  of  house  furnishings,  of  means  for  amuse- 
ment and  for  pleasure  abound. 

No  less  significant  is  the  change  in  the  popular 

estimate  of  the  things  which  comprise 

the  necessaries  of  life.  A  hundred  years 
ago  the  necessaries  were  few  and  simple.  At  the 


INTRODUCTION  17 

present  time  they  have  increased  in  both  number  and 
variety.  Each  decade  witnesses  the  addition  of  new 
classes  of  necessaries  to  the  long  category  which  civili- 
zation has  already  prescribed. 

Although  much  of  the  well-to-do  living  is  based  on 
a  desire  for  comforts  and  luxuries,  another  great  seg- 
ment rests  upon  the  desire  of  the  well- 
to-do  to  "get  ahead."  Pride  leadsmen 
to  furnish  a  house,  to  dress,  to  spend,  and  to  live  in  a 
manner  which  is  in  no  sense  dictated  by  personal 
desire.  The  well-to-do  see  the  cost  of  living  problem 
as  a  problem  of  getting  the  largest  possible  number 
of  goods  and  services  in  return  for  the  income  which 
they  spend.  The  cost  of  living  is  rising  for  them 
because  the  demand  for  things,  services  and  enjoyments 
is  greater. 

The  family  under  a  thousand  dollars  is  interested 
in  changing  prices  rather  than  in  changing  standards 
of  life.  For  such  a  family  the  pressing 
Chapter  VIII  Question  is  one  of  securing  an  amount  of 
income  sufficient  to  buy  the  things  which 
the  family  needs  for  the  maintenance  of  physical  effi- 
ciency. "When  prices  rise  the  low-income  family  may 
be  forced  to  deprive  itself  of  some  essential  item  in  the 
family  budget. 

There  is  a  wide-spread  tendency  to  lay  the  burden 
for  price  increases  upon  some  individual,  or  group 

n.    .    ,v       of  individuals.    The  proceeding  is  essen- 
C banter  IX 

tially  unfair.     There  may  be  cases  where 

an  individual  has  been  responsible  for  increasing 
prices.  Such  instances  are,  however,  the  exception 
and  not  the  rule.  The  rise  in  prices  is  the  result,  for 


18  INTEODUCTION 

the  most  part,  of  large  economic  forces  which  are  Dot 
amenable  to  individual  dictation. 

The  most  startling  feature  of  the  recent  increase 

in  the  prices  of  food  is  the  rising  price  of  meat  and 

Cha  ter  X         dairy  products.     A   study  of  the  facts 

shows  that  the  supply  of  meat  and  dairy 

animals  is  failing  to  keep  pace  with  the  demand. 

The  gold  supply  of  the  world  is  increasing  more 
rapidly  now  than  at  any  time  since  1850.     In  most 

r*.    *    vi        commercial  countries  gold  is  the  com- 
tnapter  XI 

modity  in  terms  of  which  all  other  com- 
modities are  measured.  Gold  is  the  financial  yard- 
stick. Unlike  the  thirty-six-inch  rule,  the  gold  dollar 
is  decreasing  in  length  ;  that  is,  it  will  buy  less  beef  or 
flour  to-day  than  it  would  buy  twenty  years  ago. 
Although  it  undoubtedly  has  some  effect  on  prices,  the 
total  influence  of  the  increasing  gold  supply  has  been 
grossly  overestimated. 

Next  to  the  increasing  gold  supply,  the  trusts  are 
more  generally  blamed  than  any  other  single  factor  for 
the  increase  in  living  costs.     An  exami- 
nation of  the  facts  shows  that  there  has 
been  no  general  increase  in  the  prices  of  trust-made 
goods.     Some  of  the  trusts  have  secured  huge  profits, 
it  is  true,  but  these  have  been  the  results  of  improved 
methods  of  production  and  not  of  increased  prices. 

Producers  insist  that  prices  have  advanced  because 
of  the  advance  in  the  cost  of  the  raw  materials  and  the 

_.     .     V1        labor  which  enter  into  manufacture.    The 

Chapter  XIII 

prices  of  raw  materials  have  changed  un- 
equally. Eaw  materials  derived  directly  from  the  land 
have  risen  rapidly  in  price,  while  semi-manufactured 


INTKODUCTION  19 

materials  have  increased  less  sharply  or  have  decreased 
in  price.  Attention  is  called  again  to  the  increase  in 
the  cost  of  land-derived  products.  Food  prices  rose 
rapidly  in  the  cases  of  meat  and  dairy  products.  The 
prices  of  those  raw  materials  most  directly  secured 
from  land  likewise  have  risen  fastest 

The  facts  show  that  during  the  past  twenty  years, 
the  values  of  agricultural  land,  timber  land,  and  city 

land  alike  reveal  a  marked  upward  tend- 
Chapter  XIV  ., 

ency.  The  facts  relating  to  value  in- 
creases during  the  past  two  decades  may  be  searched 
in  vain  for  any  parallel  to  the  rapid  increase  in  the 
values  of  those  particularly  desirable  parts  of  the 
earth's  surface  upon  which  mankind  is  most  intimately 
dependent  for  his  living. 

The  meager  figures  relative  to  wage  changes  indicate 
that  there  has   been  a  general  tendency  to  increase 

^L    .    v,        wages.     Whether  this  increase  has  been 
Chapter  XV 

offset  by  a  corresponding  increase  in  effi- 
ciency, the  facts  at  hand  do  not  show.  On  the  face  of  the 
returns,  labor  engaged  in  agriculture,  in  transportation, 
in  construction  work,  in  mining  and  in  manufacturing, 
is  paid  at  a  higher  rate  in  1914  than  it  was  in  1890. 

The  high  cost  of  living  appears  as  an  issue  of  im- 
mense proportions.     Its  phases  are  various ;  its  causes 

manifold.     No  one  can  put  his  finger  on 
PART  IV 

Chapter  XVI  anv  one  cause  and  ^Ji — "  ^o  here  !  "  or 
11  Lo  there,  is  the  cause  of  the  increasing 
cost  of  living."  Nevertheless,  the  question  must  be 
solved ;  otherwise  Western  civilization  is  a  self-con- 
fessed failure.  The  remedy  before  the  well-to-do  is  an 
individualistic  one.  Each  man  is  his  own  want  ad- 


20  INTRODUCTION 

juster.  The  remedy  open  to  the  worker  is  a  social 
one.  He  can  secure  more  returns  for  his  labor  by  buy- 
ing at  lower  prices,  or  by  getting  more  service  for  his 
expenditure. 

While  men  cannot  follow  Rousseau's  behest  and  get 
back  to  nature,  they  can  simplify  their  wants,  bring 

them  within  the  reach  of  their  incomes. 
Chapter  XVII  <.•?*.• 

and  look  for  satisfaction  in  other  ways 

than  through  the  possession  of  things.  The  hope  for 
the  well-to-do  lies  in  a  new  vision  of  life.  The  ideal 
of  possession  must  give  place  to  that  of  service. 

Society  must  get  back  to  the  land.     The  cost  of  liv- 
ing of  the  well-to-do  can  be  effectively  reduced  by  de- 

Ch      r  XVIII    creas*n&  tne  number  °f  services  upon 
which   they  depend,   and  by   bringing 
them  into  direct  contact  with  the  work  of  producing 
as  many  as  possible  of  the  things  which  they  use. 

Education  can  play  a  large,  though  indirect,  part  in 
reducing  living  costs.     People  may  be  taught  to  buy 
intelligently,  and  to  use  to  the  best  ad- 
vantage the  things  which  they  purchase. 
Then,  too,  producers  and  consumers  may  be  educated 
to  cooperate,  and  thus  to  reduce  the  costs  of  production 
and  of  marketing.     Education  will  raise  the  standard 
of  public  intelligence,  and  strengthen  the  sinews  of 
public  demand. 

Another    ready  means  of  price  reduction  lies  in 
greater  efficiency  of  food  distribution.     Man  has  been 
separated  from  his  pigs,   chickens  and 
kitchen  garden.     As  a  villager,  he  sup- 
plied many  of  his  own  wants.     As  a  city  dweller,  he 
buys  the  food  which  he  needs.     That  the  food  may 


INTRODUCTION  21 

reach  the  consumer  at  the  lowest  possible  figure,  it  is 
necessary  that  the  steps  from  producer  to  consumer  be 
reduced  to  a  minimum  and  simplified  to  the  utmost. 

Speedy  increase  of  land  values  makes  clear  the  im- 
portance of  conservation  as  a  means  of  regulating  liv- 
ing costs.  No  more  significant  duty  rests 
upon  society  than  the  conservation  of  its 
soil  fertility,  its  timber  and  mineral  resources,  and  its 
water  rights.  Such  a  policy  is  a  long-term  policy.  No 
one  administration  can  inaugurate  it  and  carry  it  to 
completion.  Nevertheless,  it  is  a  social  investment  of 
the  utmost  value. 

Most  boys  who  go  through  the  schools  will  engage  in 
some  occupation.  The  real  question  before  the  school 
is, — "Shall  these  boys  go  out  of  the 
schools  fitted  to  do  their  work  well  or 
badly  t"  Vocational  training  is  the  answer.  Labor 
efficiency  may  likewise  be  increased  by  improving 
health,  lengthening  life,  providing  incentive,  and  im- 
proving mechanical  appliances.  All  such  devices,  by 
adding  to  the  productive  power  of  the  community,  tend 
to  lower  prices. 

The  chaotic  arena  of  financial  controversy  offers  rich 

opportunities  for  activities  that  must  finally  play  a 

large    part  in  stabilizing  values.     The 

gold  supply  is  increasing  so  rapidly  that 

it  is  no  longer  a  stable  medium  of  exchange.     Nothing 

short  of  an  agreement  between  the  great  commercial 

nations  to  control  the  output  of  gold  mines,  or  to  use 

fiat  money,  can  stabilize  gold  values. 

Monopoly  means  a  control  over  a  commodity,  which 
is  sufficient  to  raise  or  to  maintain  its  price  above  the 


22  INTRODUCTION 

price  level  of  free  competition.     The  sources  of  mon- 
opoly power  in  the  United  States  are  laud  ownership, 
franchises    and    similar    public   grants, 
patents,  credit  monopoly,  and  industrial 
monopoly.     All  forms  of  monopoly  power  must  be 
taken  from  the  hands  of  individuals,  and  lodged  in 
society.     Through  this  means  drastic  modifications  un- 
doubtedly can  be  made  in  the  cost  of  living. 

Perhaps  the  most  practical  step  toward  the  reduction 
of  monopoly  power  is  the  readjustment  of  taxation  on 
Cha  terXXV     ^S  ^)as^s  assumption, — "  Each  man  has 
a  right  to  all  that  he  earns,  and  to  noth- 
ing more."    Taxation  is  the  legitimate  means  by  which 
the  people  can  take  over  all  values  belonging  to  society. 
The  national  administration  faces  a  grave  responsi- 
bility.    To  its  care  has  been  committed  the  task  of  re- 

v,    ,    ducing  the  cost  of  living.     No  more  in- 
Chapter  XXVI  .        °.    , . 

sistent  issue  presses  for  solution.  A  suc- 
cessful program  for  reform  must  include  increased  ef- 
ficiency, conservation,  and  monetary  reorganization, 
besides  the  elimination  of  monopoly  profits,  through  a 
readjustment  of  taxation.  The  well-to-do  can  settle 
the  matter  by  simpler  living ;  but  the  lower-income 
families,  which  comprise  the  great  mass  of  the  popula- 
tion, are  dependent  for  relief  on  a  policy  which  will 
give  to  each  man  what  he  earns  and  no  more,  which 
will  take  for  social  uses  the  values  created  by  society, 
and  which  will  regard  the  state  as  an  organization  of 
citizens  effected  and  maintained  to  minister  to  their 
needs  and  to  the  needs  of  their  descendants. 


Reducing  the  Cost  of  Living 


THE  COST  OF  LIVING  AS  A  POLITICAL 
ISSUE 

1.  PLATFORM  PLANKS  ON  THE  HIGH  COST  OF  LIVING 
SINCE  1895,  there  lias  been  an  almost  uninterrupted 
rise  in  the  prices  of  foods  and  of  other  important  com- 
modities. The  Republican  party  a  decade  ago  talked 
about  the  full  dinner  pail,  yet  the  years  of  Eepublican  ad- 
ministration passed  without  any  successful  adjustment 
of  the  wage  scale  to  rising  prices.  The  subject  was  dis- 
cussed around  breakfast  tables,  bridge  tables,  and  caf6 
tables,  alike.  It  was  an  issue  which  occupied  a  prom- 
inent place  in  the  thinking  of  every  one  who  was  buy- 
ing things.  Women  knew  more  about  it  than  men,  be- 
cause they  do  most  of  the  spending  in  the  ordinary 
home.  Men  had  learned  of  it,  however,  since  they 
supply  most  of  the  money  which  is  spent.  By  1911, 
the  increasing  cost  of  living  was  so  manifest  an  issue 
that  no  party  could  afford  to  ignore  it. 

Although  the  parties  differ  in  their  analysis  of  the 
cost  of  living  problem,  they  agree  in  their  recognition 
of  its  imperative  demand  for  solution.  «The  high 
cost  of  living  is  a  serious  problem  in  every  American 


24         BEDUCING  THE  COST  OF  LIVING 

home,"  declares  the  Democratic  party.  The  Repub- 
lican party  states  that, — u  The  steadily  increasing  cost 
of  living  has  become  a  matter  not  only  of  national,  but 
of  world-wide  concern.  .  .  .  When  the  exact  facts 
are  known,  we  will  take  the  necessary  steps  to  remove 
any  abuses  that  may  be  found  to  exist,  in  order  that 
the  cost  of  food,  clothing,  and  shelter  of  the  people 
may  be  in  no  way  unduly  or  artificially  increased." 
The  Progressive  party  platform  holds  that  "  the  high 
cost  of  living  is  due  partly  to  world-wide,  and  partly 
to  local,  causes ;  partly  to  natural,  and  partly  to  arti- 
ficial causes."  In  each  case,  the  issue  is  analyzed  at 
some  length. 

The  matter  of  solution  is  variously  handled  in  the 
three  platforms.  The  Democratic  platform  ascribes 
the  high  cost  of  living  to  the  high  tariff  and  the  exist- 
ence of  trusts.  The  Eepublican  platform  specifically 
denies  this.  "The  fact  that  it  is  not  due  to  the  pro- 
tective tariff  system  is  evidenced  by  the  existence 
of  similar  conditions  in  countries  which  have  a  tariff 
policy  different  from  our  own,  as  well  as  by  the  fact 
that  the  cost  of  living  has  increased,  while  rates  of 
duty  have  remained  stationary  or  have  been  reduced. " 
The  Progressive  party  initiates  a  more  specific  solution. 
"The  measures  proposed  in  this  platform  on  various 
subjects,  such  as  the  tariff,  the  trusts,  and  conserva- 
tion will  of  themselves  remove  the  artificial  causes. 
There  will  remain  other  elements,  such  as  the  tendency 
to  leave  the  country  for  the  city,  waste,  extravagance, 
bad  systems  of  taxation,  poor  methods  of  raising  crops 
and  bad  business  methods  of  marketing  crops.  To 
remedy  these  conditions  requires  the  fullest  informa- 


COST  OF  LIVING  AS  A  POLITICAL  ISSUE  25 

tioii,  aud  based  on  this  information  the  effective  gov- 
ernment supervision  and  control  to  remove  all  the  ar- 
tificial causes."  Specific  remedial  measures  are  not 
abundant  in  any  of  the  platforms.  The  Democrats  pro- 
pose to  reduce  the  tariff  and  break  up  criminal  con- 
spiracies. The  Republican  party  commits  itself  to 
"support  and  promote  scientific  inquiry  into  the  causes 
which  are  operative,  both  in  the  United  States  and 
elsewhere,  in  increasing  the  cost  of  living. "  The  Pro- 
gressive party  pledges  itself  to  "such  full  and  immedi- 
ate inquiry  and  to  immediate  action  to  deal  with 
every  need  such  inquiry  disclosed."  Among  the  three 
parties,  there  is  unusual  agreement  as  to  the  statement 
of  the  problem,  aud  no  inconsiderable  uniformity  in 
the  vagueness  and  unsatisfactory  indefiniteness  of  the 
remedies  which  they  propose. 

2.  THE  STAND  OF  THE  DEMOCRATIC  PARTY 
The  Democratic  party  did  not  declare  itself  in  favor 
of  any  unusual  policies  with  regard  to  the  cost  of  living, 
but  it  went  into  office  with  the  best  wishes  of  a  large 
section  of  the  American  people,  who  believed  that 
through  its  activities  the  cost  of  living  might  be 
reduced.  The  rapid  price  increases  of  the  years  im- 
mediately preceding  the  election  of  1912  had  brought 
the  cost  of  living  issue  to  a  very  acute  stage.  What- 
ever its  causes,  the  Eepublican  party  had  "stood pat," 
making  no  active  effort  to  remedy  them.  The  Demo- 
crats, alleging  this  inaction  as  a  cause  of  increasing 
prices,  declared  that  they  could  bring  about  material 
price  reductions. 

"The  Republican  party,"  declares  the  Democratic 


26         REDUCING  THE  COST  OF  LIVING 

platform,  "attempts  to  escape  from  responsibility  for 
present  conditions  by  denying  that  they  are  due  to  a 
protective  tariff.  We  take  issue  with  them  011  this 
subject,  and  charge  that  excessive  prices  result  in  a 
large  measure  from  the  high  tariff  laws  enacted  and 
maintained  by  the  Eepublican  party,  and  from  trusts 
and  commercial  conspiracies  fostered  and  encouraged 
by  such  laws,  and  we  assert  that  no  substantial  relief 
can  be  secured  for  the  people  until  import  duties  on 
the  necessaries  of  life  are  materially  reduced  and  these 
criminal  conspiracies  broken  up."  The  increase  of  liv- 
ing costs  under  successive  Eepublicau  administrations, 
and  the  failure  of  the  Republican  party  to  take  any 
drastic  steps  to  reduce  the  tariff  or  break  up  the  trusts, 
lent  additional  color  to  these  declarations  of  the  Demo- 
cratic platform.  The  country,  impatient  under  the 
goad  of  rising  prices,  saw  in  the  Democratic  program  a 
possible  loophole  of  escape  from  the  high  cost  of  living. 
No  one  can  fairly  maintain  that  the  present  Demo- 
cratic administration  will  stand  or  fall  as  it  solves  or 
fails  to  solve  the  high  cost  of  living  problem,  yet  it 
may  be  asserted  with  much  show  of  reason  that  the 
popular  judgment  of  the  success  or  failure  of  the  pres- 
ent administration  will  rest  in  large  measure  on  that 
issue.  The  President  may  be  never  so  able  as  an 
administrator ;  his  diplomatic  adventures  may  be 
never  so  successful ;  he  may  direct  his  party  with 
unfailing  energy  and  courage ;  he  may  carry  out  the 
party  platform  to  the  letter  ;  nevertheless,  if  at  the  end 
of  his  administration  prices  are  as  high,  or  higher  than 
they  were  when  he  took  office,  the  country  will  react 
vigorously  against  the  Democratic  party. 


COST  OF  LIVING  AS  A  POLITICAL  ISSUE   27 

Should  the  Democrats  fail  to  reduce  the  high  prices, 
they  will  throw  themselves  open  to  the  charge  of  failure 
in  a  matter  which  comes  directly  to  the  attention  of 
almost  every  voter.  Most  issues  of  political  impor- 
tance are  far  removed  from  the  housewife  and  from  the 
man  of  the  street.  The  tariff,  diplomacy,  trust  regula- 
tion, and  national  conservation  are  splendid  in  the 
abstract,  but  they  have  no  concrete  meaning  in  the 
ordinary  home.  High  prices  are  known  and  under- 
stood wherever  income  is  received  and  commodities 
are  purchased.  The  Democratic  party  may  feel,  and 
justly  so,  that  it  will  achieve  successes  in  fields  other 
than  those  involving  the  high  cost  of  living.  For  the 
great  majority  of  mankind,  however,  the  price  of  com- 
modities in  1915  and  1916  will  serve  as  the  most  con- 
crete measure  of  the  success  or  failure  of  Wilsouian 
democracy.  A  considerable  reduction  in  prices  during 
those  years  will  send  the  Democratic  party  back  into 
power  on  the  high  tide  of  popular  favor.  An  increase 
in  prices  will  fasten  upon  the  country  at  large  a  belief 
that  the  Democrats  have  failed  in  their  main  purpose. 

3.    WILL  THE  DEMOCRATS  EEDUCE  THE  COST 
OF  LIVING1? 

Pursuant  to  the  policy  stated  in  its  platform,  the 
Democratic  party,  immediately  after  taking  office, 
undertook  three  lines  of  activity,  all  of  them  aimed 
more  or  less  directly  at  the  high  cost  of  living.  In  the 
first  place,  a  special  session  of  Congress  passed  a  tariff 
bill  that  materially  reduced  import  duties.  The 
business  world  stood  appalled  at  the  revolution 
which  the  tariff  was  to  effect  in  its  status.  Industry, 


28         KEDUCING  THE  COST  OF  LIVING 

particularly  the  textile  industry,  was  foredoomed  to 
annihilation  according  to  many  forecasts.  The  time 
has  not  yet  come  for  scientific  analysis,  but  the  official 
enactment  of  the  tariff  bill  prescribing  a  level  of  duties 
considerably  below  that  of  any  recent  Republican  tariff, 
has  resulted,  apparently,  in  no  business  failure  or 
calamity.  What  ultimate  effect  the  passing  of  the 
tariff  bill  may  have  on  prices  remains  to  be  seen.  For 
the  present,  prices  show  no  material  change  that  may 
be  ascribed  to  tariff  reductions. 

The  second  important  measure  which  the  Democratic 
party  passed  through  Congress  was  the  currency  law, 
reorganizing  the  banking  system.  For  a  long  time 
charges  had  been  made  respecting  the  existence  of  a 
Wall  Street  money  trust.  Interlocking  directorates, 
chains  of  banks  and  trust  companies,  and  the  concen- 
tration of  great  masses  of  capital  in  a  few  hands  resulted 
in  the  virtual  control  of  the  nation's  credit  by  a  small 
group  of  men.  The  dangers  of  such  control  were 
manifest ;  its  effect  upon  competition  was  apparent. 
Some  form  of  decentralized  banking  was  therefore 
necessary,  and  the  Democratic  scheme  for  regional 
banks  replaced  the  banking  system  which  had  grown 
up  since  the  Civil  War. 

The  effects  of  the  financial  reorganization  brought 
about  by  the  currency  law  remain  to  be  seen.  That 
the  change  has  materially  modified  external  conditions 
in  the  banking  world  is  obvious.  That  it  has  seriously 
impaired  the  concentrated  power  of  certain  financial 
interests  is  not  so  certain.  What  its  effect  on  prices 
may  finally  be,  the  future  alone  can  disclose. 

The  third  proposition  advocated  by  the  Democrats 


COST  OF  LIVING  AS  A  POLITICAL  ISSUE   29 

was  concerned  with  the  regulation  of  industrial  com- 
binations. Blame  for  most  of  the  ills  incident  to 
modern  life  had  been  for  a  decade  heaped  on  the  trusts. 
The  Republican  party  had  made  attempts,  more  or 
less  successful,  to  regulate  trusts.  The  Democratic 
party  placed  its  trust  program  before  the  country  in 
the  form  of  a  number  of  significant,  regulative 
measures.  All  of  these  measures  were  based  on  the 
general  economic  theory  that  competition  must  be 
restored,  and  that  any  attempt  at  an  ultimate  solution 
of  economic  problems  must  be  based  upon  this  resto- 
ration of  competition.  Again,  the  future  must  be  relied 
upon  for  an  answer  as  to  the  efficacy  of  the  Democratic 
trust  program. 

4.  THE  ISSUE  BEFORE  THE  CITIZEN 
The  thoughtful  citizen  who  has  watched  the  rapid 
climb  of  prices  during  the  past  two  decades,  and  who 
has  an  interest  in  the  outcome  of  the  present  political 
movements,  naturally  asks  himself  the  question, — 
u  Will  these  three  star  plays  of  the  Democratic  admin- 
istration lead  to  the  desired  reductions  in  the  cost  of 
living,  without  which  the  Democratic  party  can 
scarcely  hope  to  win  another  national  election!" 
Nearly  every  voter  is  looking  anxiously  for  an  answer 
to  that  question. 

The  popular  judgment  of  the  success  or  failure  of 
the  Democratic  administration  in  the  success  or  failure 
of  its  efforts  to  control  the  high  cost  of  living  will  be 
passed  wholly  irrespective  of  the  merits  of  the  case. 
Popular  opinion  is  hazy  on  the  whole  cost  of  living 
question.  Much  expert  opinion  is  no  less  nebulous. 


30         EEDUCING  THE  COST  OF  LIVING 

The  atmosphere  of  confidence,  which  has  thus  far 
surrounded  the  administration  at  Washington,  arises 
out  of  the  belief  that  considerable  reductions  in  the 
cost  of  living  will  follow  the  passage  of  the  measures 
which  the  President  has  so  ably  fathered.  Whether 
they  will  have  the  desired  effect  depends  upon  neither 
public  opinion  nor  Democratic  pronouncements,  but 
rather  upon  the  underlying  causes  which  are  operating 
to  raise  living  costs. 


n 

THE  COST  OF  LIVING  AS  A  SOCIAL 
PROBLEM 

1.  A  SOCIAL  ISSUE  BECOME  POLITICAL 
THE  cost  of  living  problem  has  forced  its  way  into 
politics.  It  is  too  full  of  unexplored  recesses,  and 
fraught  with  too  many  unmeasured  possibilities  to 
make  a  welcome  political  issue.  Many  political  issues 
are  woven  from  the  fertile  imaginations  of  astute  vote- 
getters.  No  such  jingo  practices  were  necessary  to 
bring  the  cost  of  living  into  the  foreground.  The 
people  knew  that  the  increasing  cost  of  living  was  a 
problem  before  the  politician  awoke  to  its  existence. 

Popular  knowledge  led  quickly  to  popular  demand. 
By  the  time  the  matter  had  reached  the  cartoonists  it 
had  assumed  real  significance.  Then  politics  acted. 

The  cost  of  living  issue  is  typical  of  those  issues 
which  are  injected  into  politics.  At  least  one  party  has 
been  persistently  telling  the  voters  that  their  dinner- 
pails  were  habitually  full.  The  advocates  of  this 
party  platform  even  went  so  far  as  to  describe  party 
allegiance  as  an  automatic  dinner-pail  filler.  Pros- 
perity was  assured,  this  party  maintained,  so  long  as 
it  remained  in  power.  In  opposition  to  these  asser- 
tions, the  phantom  of  advancing  prices  stalked  through 
women's  minds,  into  the  columns  of  daily  news,  and 
into  the  funny  sheet.  "  Cost  of  Necessaries  Jumps 


32         EEDUCING  THE  COST  OF  LIVING 

Again,"  the  bead-liner  announced,  and  the  cartoonist 
built  a  table  with  extension  legs,  and  loaded  it  down 
with  a  tempting  dinner,  which  the  legs  waved  far 
above  the  reach  of  the  hungry  family  seated  about. 
The  issue  was  made  on  the  bread  and  butter  appeal. 

The  increasing  cost  of  living  has  been  converted 
into  a  live  issue,  not  because  political  economists  and 
politicians  know  anything  about  it.  Indeed,  there  are 
few  problems  on  which  their  knowledge  is  less  accurate. 
The  issue  has  arisen  because  the  women  and  men  of 
the  country,  who  pay  the  grocer  and  the  dry- goods 
merchant,  have  found  it  increasingly  difficult  to  make 
ends  meet 

2.  THE  CHALLENGE  OF  THE  HOME 
The  cost  of  living  problem  is  a  problem  which  con- 
fronts those  who  spend  income  ;  therefore  it  arises  in 
the  home.  The  home  made  its  appeal  to  the  powers 
that  dominate  politics,  asking, — u  How  shall  we  buy 
the  necessaries  of  life  ? ' ' 

The  politicians  might,  under  certain  circumstances, 
answer  the  question  by  insisting  that  with  the  rise  in 
prices  there  has  gone  a  corresponding  increase  in  in- 
come. The  peculiar  circumstances  which  would  jus- 
tify such  a  statement  are  frequently  not  present,  how- 
ever ;  hence  the  statement  cannot  be  made.  The  chal- 
lenge of  the  home  remains  unshaken,  and  becomes 
automatically  an  ugly,  dangerous  issue  in  the  field  of 
politics. 

The  man  who  raises  the  issue  must  be  bold  as  well 
as  learned.  The  homes  hang  upon  his  word.  If  he 
says, — "  Let  me  take  this  issue  with  me  into  the  White 


COST  OF  LIVING  AS  A  SOCIAL  PEOBLEM   33 

House,  and  I  will  solve  it  for  you,"  the  homes,  if  they 
trust  him,  axe  prone  to  accept  his  proposition.  Woe 
to  him  if  he  fails,  however  !  The  homekeepers  have 
their  eyes  fixed  intently  upon  him.  By  this  one  ques- 
tion he  will  be  justified  or  condemned. 

The  cost  of  living  is  a  peculiarly  dangerous  issue  to 
handle,  because  the  homekeepers  cannot  be  fooled  in 
regard  to  it.  It  is  possible  to  assure  an  ordinary  citi- 
zen that  the  money-trust,  or  some  other  trust,  is  dis- 
solved ;  that  the  natural  resources  of  the  nation  are  be- 
ing conserved  ;  that  the  foreign  policy  is  sound.  The 
man  on  the  street  must  accept  the  word  of  some  one 
on  such  matters,  because  he  has  no  means  of  directly 
confirming  his  own  judgment.  The  produce  market 
and  the  grocer's  store  offer  a  daily  opportunity  for  the 
homekeeper  to  confirm  her  judgments  regarding  the 
cost  of  living. 

The  problem  of  the  increasing  cost  of  living  origi- 
nates in  the  home.  There  it  has  its  most  obvious  ef- 
fects,— in  the  relation  between  income  and  expendi- 
ture. From  the  home  it  has  been  forced  out  into 
politics.  At  bottom,  however,  it  is  a  social  problem. 

3.     WHAT  is  LIVING  ? 

What  does  living  mean  ?  A  part  of  the  answer  is 
contained  in  the  phrase, — "  The  American  standard  of 
living,"  as  contrasted  with  that  of  some  other  locality 
— China  or  Hindustan,  for  example. 

A  little  reflection  will  reveal  the  immense  range  of 
meanings  which  may  be  attached  to  "  living."  Each 
town  or  city,  and  each  social  group  within  a  town  or 
city,  has  its  own  ideas  on  the  subject.  Living  stand- 


34         EEDUCING  THE  COST  OF  LIVING 

ards  also  vary  from  one  part  of  the  world  to  an- 
other. Unless  living  be  taken  to  mean  u  the  state  o.f 
being  alive,"  as  contrasted  with  death,  there  can  be 
no  definite  meaning  attached  to  the  word.  A  social 
group  at  a  given  time  has  its  own  definition  of  living. 
For  the  savage  living  means  an  opportunity  to  get 
food,  to  escape  from  enemies,  to  protect  himself  against 
the  inclement  weather.  The  typical  American,  unused 
to  such  living,  would  describe  it  as  unendurable  hard- 
ship. The  American  Indian  with  a  well-organized 
system  of  government  and  a  written  language,  a 
knowledge  of  agriculture  and  of  many  of  the  simpler 
arts,  lived  crudely  in  comparison  with  American  pres- 
ent-day standards.  The  Jew  in  the  ghettos  of  Eussia 
lives  under  conditions  of  congestion  and  insauitation 
which  seem  unendurable  when  contrasted  with  Ameri- 
can standards.  When  the  Jew  or  the  Sicilian  settles 
in  the  ghettos  of  New  York,  and  for  the  first  time  in 
his  life  enjoys  the  privilege  of  glass  windows  and 
wooden  floors,  he  feels  that  he  has  taken  a  long  step 
toward  the  joys  of  paradise.  Illustration  might  be 
multiplied  of  variations  in  living  standards  :  suffice  it 
to  say  that  the  members  of  each  group  are  expected  to 
conform.  When  men  speak  of  the  cost  of  living  they 
therefore  mean  the  cost  of  that  kind  of  living  which 
has  the  sanction  of  the  community.  Such  an  estimate 
is  relative,  not  absolute.  The  American  workingman 
could  live  on  black  bread,  rice,  and  soup.  He  could 
herd  his  family  in  a  single  room  ;  he  could  buy  one 
good  suit  every  ten  years ;  he  could  suffer  from  typhoid 
and  smallpox  ;  he  could  be  subject  to  all  of  the  malad- 
justments which  afflict  men  in  more  primitive  com- 


COST  OF  LIVING  AS  A  SOCIAL  PROBLEM  35 

munities.  The  American  workiugmau  could  suffer 
these  things  and  still  live,  yet  from  the  American 
view-point  he  would  enjoy,  not  a  living,  but  a  bare  ex- 
istence. 

The  native  American  has  accustomed  himself  to  a 
certain  standard  of  living.  The  Jew  or  the  Sicilian, 
settling  iu  the  ghetto  of  New  York,  soon  discovers  this. 
If  he  fails  to  make  the  discovery,  his  children  make 
it  for  him,  and  they  insist  on  adopting  the  more  elab- 
orate American  standard. 

There  are  a  number  of  things  which  the  ordinary 
American  man  or  woman  has  which  may  be  unneces- 
sary in  the  strictest  sense  of  the  word.  Eibbons, 
finely  finished  shoes,  well-cut  clothes,  sanitary  conve- 
niences, newspapers  and  street  lights  are  comparatively 
modern  products.  Ages  of  men  lived  without  them. 
Yet  when  the  bathtub  and  the  tooth-brush  have  once 
been  introduced  into  society,  on  what  grounds  can 
they  legitimately  be  excluded  ?  The  standard  of  liv- 
ing is  fixed  by  the  advancement  of  civilization. 
"The  cost  of  living "  is  the  cost  of  that  standard. 

4.    THE  INCREASED  COST  OF  KEEPING  THE  PACE 

American  life  involves  a  universal  competition  for 

equality  or  for  excellence.     From  the  lowest  to  the 

highest  income  rank  men  and  women  strive  to  excel  in 

the  number  or  splendor  of  things  that  they  have. 

However    desirable  or  undesirable    this  competitive 

regime,  it  exists  none  the  less  surely.     Therefore  in 

the  discussion  of  the  cost  of  living  it  must  be  reckoned 

with. 

The  active  competition  for  excellence,  coupled  with 


36         REDUCING  THE  COST  OF  LIVING 

the  advance  of  science,  has  resulted  in  a  startlingly 
rapid  increase  in  wants.  Who  wanted  a  bathtub  fifty 
years  ago  ?  How  many  men  wanted  an  automobile  in 
1890  f  Who  wanted  prepared  breakfast  foods  in  the 
last  generation?  Who  wanted  telephones,  phono- 
graphs, or  moving  picture  shows  when  our  fathers 
were  young  ?  All  of  these  things  are  new,  and  the 
want  for  them  could  not  arise  before  people  knew  that 
such  things  existed.  Furthermore,  these  are  only  a 
few  illustrations  from  among  the  countless  numbers  of 
new  things  which  pack  the  counters  of  department 
stores  and  fill  the  catalogues  of  mail-order  houses. 
Education,  advertising,  freedom  to  pass  from  one 
social  group  to  another,  the  general  feeling  of  equality 
in  a  democratic  society,  and  the  desire  to  have  as  many 
things  as  your  neighbor,  all  tend  to  push  up  the  stand- 
ards of  every  group  in  the  population. 

The  increase  of  wants  and  the  development  of  civili- 
zation go  hand  in  band.  Unless  they  are  accompanied 
by  increasing  income,  an  increase  of  wants  leads  away 
from  happiness  toward  dissatisfaction.  It  is  useless  to 
want  a  grand  piano  on  ten  dollars  a  week.  Such  an 
increase  in  wants  is,  however,  a  spur  to  ambition,  and 
consequently  an  effective  means  of  encouraging  ac- 
tivity. Most  men  will  not  expend  energy  until  they 
are  stimulated  by  wants  which  press  for  satisfaction. 
Human  wants  are  the  driving  forces  behind  civilization. 

5.    "LIVING"  MEANS  MORE  THAN  " PRICES" 
A  little  thought  will  convince  any  one  that  the  term 
"  increasing  cost  of  living  "  really  means  more  than  an 
increase  in  prices.     In  fact,  for  a  certain  group  of  the 


COST  OF  LIVING  AS  A  SOCIAL  PEOBLEM  37 

population,  the  chief  element  in  the  increasing  cost  of 
living  is  the  increase  in  the  number  of  things  that  a 
man  must  have  in  order  to  "  live."  To  be  sure,  the  in- 
crease in  prices  plays  a  part.  For  the  family  living  on 
$600  a  year  it  plays  a  very  material  part.  For  families 
having  more  than  $3,000  the  increase  in  prices  is  im- 
material. The  real  stumbling-block  to  their  happi- 
ness is  an  increase  in  the  number  of  things  that  people 
must  have  in  order  to  "  belong." 

All  living  has  a  definite  purpose, — the  obtaining  of 
a  certain  amount  of  things.  The  things  included  in  a 
living  are  those  which  satisfy  human  wants,  such,  for 
example,  as  the  wants  for  shelter  and  clothing,  the 
wants  for  food,  amusement,  and  the  like.  The  wants 
of  different  people  vary.  The  wants  of  one  section  of 
the  country  are  not  the  same  as  the  wants  of  another 
section.  Generally  speaking,  however,  there  are  cer- 
tain things,  like  clothing,  simple  foods,  shoes,  hats, 
and  houses,  which  all  people  want  and  use.  The  total 
cost  of  living  for  any  family  or  any  individual  varies 
with  the  standard  which  that  family  or  individual 
must  maintain. 

The  increase  in  the  number  of  things  which  men  in- 
clude in  their  ideal  of  living  and  the  increase  in  the 
price  of  these  things,  are  knotted  together  into  a  cost 
of  living  problem.  Generations  of  strenuous  life  and 
of  avid  social  competition  have  tied  these  knots  se- 
curely, until  a  time  has  been  reached  when  it  is  an  ex- 
tremely difficult  matter  to  undo  them.  It  is,  of  course, 
possible  to  follow  Alexander's  example  and  untie  the 
knot  by  cutting  it.  For  the  man  who  wishes  to  live  in 
American  twentieth  century  society,  however,  some 


38          EEDUCING  THE  COST  OF  LIVING 

other  solution  must  be  discovered.  The  well-to-do 
people  in  any  American  community  are  interested  for 
the  most  part  in  a  determination  of  the  amount  of 
things  which  they  shall  buy  ;  they  never  want  for  the 
necessaries  of  life.  There  is  no  time  in  the  well-to-do 
household  when  the  possibility  of  missing  a  breakfast 
will  be  considered.  Breakfast  will  be  served,  of 
course,  as  will  lunch  and  dinner.  The  question  as  to 
what  will  constitute  breakfast,  lunch,  and  dinner  is, 
however,  a  very  real  one.  The  question,  too,  as  to 
where  and  how  the  family  shall  spend  its  vacations, 
what  form  its  recreation  shall  take,  and  to  what  extent 
it  is  justified  in  spending  income  for  luxuries,  occu- 
pies an  important  place  in  all  discussions.  Well-to-do 
families  accept  the  necessaries — food,  clothing,  and 
shelter — as  a  matter  of  course.  They  are  at  odds  over 
luxuries.  Since  they  cannot  have  all  that  they  want, 
they  must  take  this  thing  or  that.  The  family  may 
have  an  automobile  or  a  new  house ;  it  cannot  have 
both.  Out  of  this  necessity  for  choice  arises  much 
middle-class  misery. 

Those  people  in  the  community  who  are  not  well-to- 
do  (in  America  this  group  probably  constitutes  at  least 
four-fifths  of  the  industrial  population)  are  concerned 
chiefly  with  the  question,  "Can  we  afford  to  buy  the 
necessaries  of  life  ?  Can  we  have  a  sanitary  house  ; 
can  we  have  nourishing  food  ;  can  we  have  clothing 
which  carries  with  it  the  ear-mark  of  respectability  ?  " 
For  such  families,  the  issues  involved  in  the  increase 
of  the  cost  of  living  bear  mainly  on  family  necessities. 

Some  idea  of  the  situation  may  be  gained  from  the 
fact  that  the  ordinary  workingman's  family  of  five 


COST  OF  LIVING  AS  A  SOCIAL  PROBLEM  39 

spends  two-fifths  of  its  income  for  food,  one-fifth  for 
rent,  and  one-sixth  for  clothing.  This  expenditure 
leaves  a  little  more  than  one-fifth  of  the  income  to 
cover  fuel  and  light,  health,  insurance,  recreation,  sav- 
ings, and  all  of  the  other  miscellaneous  items  of  ex- 
penditure. For  a  family  living  on  $750,  the  amount 
available  for  all  of  these  purposes  would  rarely  exceed 
$160  or  $175  a  year. 

The  family  with  more  than  $1,200  a  year  is  not  de- 
prived of  the  necessaries  of  living  when  prices  in- 
crease. A  man  with  less  than  $1,200  may  be.  Both 
families  are  engaged  in  an  attempt  to  increase  the  num- 
ber of  things  which  they  may  have  and  the  number  of 
enjoyments  that  they  may  secure.  For  both,  there- 
fore, the  increasing  cost  of  living  is  a  significant  prob- 
lem. For  the  man  under  $1,200  it  is  deeply  signif- 
icant. If  he  receives  less  than  $750  it  is  sinister. 

Whether  the  increasing  cost  of  living  is  looked  upon 
vis  an  issue  confronting  the  well-to-do,  or  as  an  issue 
confronting  families  with  small  incomes,  it  is  an  in- 
tense and  vital  one.  Its  presence  in  a  community  is 
the  result  not  of  individual  caprice,  or  of  individual 
decision.  Eather  it  is  the  product  of  social  forces 
which  have  been  operating  unnoticed  for  generations. 

6.    SOCIAL  REORGANIZATION  HAS  FORCED  THE 
ISSUE 

The  cost  of  living  problem  has  become  a  problem  in 
the  process  of  a  social  reorganization  which  the  eight- 
eenth century  began,  and  which  the  nineteenth  century 
carried  far  toward  its  logical  conclusion.  No  individ- 
ual, or  number  of  individuals,  could  have  made  an 


40         BEDUCING  THE  COST  OF  LIVING 

issue  of  such  stupendous  proportions.  It  required  the 
readjustment  of  family  life  ;  the  reorganization  of  the 
city  ;  the  movement  from  the  village  to  the  large  center 
of  population ;  the  growth  of  specialized  industry,  and 
the  increasing  dependence  of  the  population  on  factory 
products,  to  throw  the  cost  of  living  issue  so  prom- 
inently into  the  foreground. 

Families  in  every  walk  of  life  have  passed  from 
independence  to  dependence.  Men  earn  what  they  can, 
and  spend  what  they  must,  meanwhile  striving  to  make 
both  ends  meet  and  to  live  according  to  the  standard 
set  by  their  friends  and  neighbors.  The  self-sufficient 
Kentucky  mountaineer  is  independent  of  prices  and 
living  costs.  The  dweller  in  a  great  city  is  tied  hand 
and  foot  to  the  cost  of  living. 

The  evidences  from  every  side  indicate  that  the  social 
problems  arising  out  of  the  change  from  village  life  to 
city  life  are  pressing  for  solution.  Advancing  standards 
on  the  one  hand  and  advancing  prices  on  the  other 
harass  the  man  whose  welfare  depends  upon  the 
amount  of  "living"  that  his  income  will  purchase. 
Working  class  and  well-to-do  families  alike  are  learn- 
ing to  understand  the  effect  of  rising  standards  and  of 
rising  prices  upon  their  welfare. 


Ill 

THE  CHANGING  FOBM  OF  AMEBICAN  LIFE 

1.    THE  COST  OF  HIGH  LIVING  MAKES  THE  COST 
OF  LIVING  HIGH 

THE  first  element  in  the  high  cost  of  living  is  the 
high  standards  which  the  American  people  have  set 
for  themselves.  Not  content  with  the  simple  definition 
of  living  laid  down  by  their  Puritan  ancestors,  they 
have  felt  called  upon  to  readjust  their  standards  with 
the  enlarging  boundaries  of  civilization. 

The  constant  redefinition  of  "living"  in  terms  of 
higher  and  higher  standards  places  before  society  a 
constantly  advancing  ideal  of  life.  While  the  goal  of 
living  is  a  will-o'-the-wisp,  no  one  can  be  expected  to 
find  any  great  satisfaction  in  a  past,  or  even  in  a 
present,  standard  of  living  upon  which  the  community 
has  agreed.  The  end  to  be  attained  beckons  from 
over  yonder,  and  thither  we  make  haste  to  go  with  all 
of  the  speed  that  desire  and  ambition  can  muster. 

That  will-o'-the-wisp,  the  cost  of  high  living,  has  an 
excellent  reason  for  existence  in  spite  of  the  numerous 
anathema  that  are  directed  against  him.  He  was 
engendered  in  the  spirit  of  social  progress,  and  his 
early  surroundings  were  those  of  a  rapidly  changing 
social  order.  Hence,  when  he  seems  over-insistent 
upon  change,  men  should  never  forget  that  he  is,  by 
hereditary  right,  the  child  of  change. 


42         REDUCING  THE  COST  OF  LIVING 

2.  NEW  WAYS  OF  GETTING  A  LIVING 
It  is  a  part  of  man's  nature,  as  it  is  of  his  training, 
to  seek  out  new  methods  of  achieving  results.  Not 
the  least  among  the  changes  which  his  indomitable 
inquisitiveness  has  wrought  are  the  changes  in  the  way 
of  making  a  living.  The  hand  rake  and  shovel  give 
place  to  power  machinery.  Every  device  which  will 
add  to  the  good  things  of  life  is  eagerly  seized  upon. 

Mankind  wishes  to  live  well.  Having  learned  that 
a  long  life  and  a  comfortable  one  may  be  assured 
through  the  adoption  of  this  device  or  of  that  one, 
some  exponent  of  progress  comes  forward,  advocating, 
insisting,  until  the  change  is  wrought.  A  new  way  of 
getting  a  living  proves  attractive  to  humanity,  partic- 
ularly when  that  new  way  is  an  improved  way.  The 
savage  who  first  used  fire  to  cook  his  food  was  un- 
questionably ridiculed,  threatened,  censured  and  per- 
haps even  executed.  His  neighbors,  tasting  of  the  mess 
which  he  had  made,  soon  adopted  his  scheme,  however, 
because  cooked  food  was  much  more  palatable  than 
food  that  was  uncooked.  The  same  thing  is  true  of 
the  use  of  the  oven.  Men,  accustomed  to  the  products 
of  the  open  fires,  laughed  until  they  ate.  The  savor 
of  the  oven-cooked  food  reassured  them,  and  made 
amends  for  many  a  hoary  tradition  now  reduced  to  the 
rank  of  a  "  barbarism  descended  from  the  past." 

3.    THE  INDUSTRIAL  REVOLUTION  AND  AFTER 
The  latest,  and  one  of  the  most  complete  changes 
ever  made  in  the  method  of  getting  a  living,  is  that  in- 
volved in  the  substitution  of  machine  labor  for  the 
labor  of  the  hand. 


CHANGING  FOEM  OF  AMEBICAN  LIFE    43 

Until  about  1750  men  made  things  with  their  hands. 
The  tools  which  they  used  were  simple  hand  tools. 
One  individual  took  a  piece  of  leather  and  turned  it 
out  of  his  shop  a  finished  shoe  ;  or  he  converted  cloth 
into  a  suit.  This  hand-craft  system  of  industry 
required  the  outlay  of  a  great  deal  of  human  energy. 
If  there  was  lugging  and  carrying,  some  man  did  the 
work.  If  the  shuttle  was  to  be  thrown,  a  human  hand 
threw  it.  Industrial  power  was  human  power,  the 
power  of  the  arms,  legs,  and  backs  of  men. 

The  industrial  revolution  involved  an  overthrow  of 
the  hand-craft  industries.  A  number  of  inventions 
coming  within  a  period  of  fifty  years  resulted  in  the 
perfection  of  the  steam  engine,  of  the  manufacture  of 
iron  and  steel,  and  of  textile  machinery.  These  inven- 
tions were  the  backbone  of  the  factory  system  of  pro- 
duction. 

Under  the  impetus  which  the  factory  system  gave 
to  civilization,  men  left  their  village  homes  and  moved 
into  great  city  hives  of  industry.  In  England  large 
groups  of  the  population  abandoned  agricultural  towns 
in  the  Southeast,  and  moved  into  the  Northwest,  where 
coal  and  iron  lay  side  by  side  awaiting  the  touch 
of  human  genius  to  convert  them  into  implements,  by 
means  of  which  the  work  of  the  world  could  be  facili- 
tated. These  newly  discovered  sources  of  mechanical 
energy  greatly  augmented  man's  power  to  produce 
wealth.  Where  the  human  hand  could  make  one  nail, 
the  machine  could  make  a  hundred.  Where  the 
human  back  could  lift  a  bushel  of  corn,  the  machine 
lifted  a  thousand.  In  every  direction  man's  authority 
over  the  forces  of  nature  was  increased  and  multiplied. 


44 


There  is  this  difference  between  the  tool  and  the 
machine.  The  tool  is  simple,  easily  manufactured, 
readily  manipulated,  and  so  cheap  as  to  be  owned  by 
those  who  use  it.  The  machine  is  complex,  intricate, 
bulky  and  costly.  It  cannot  be  operated  or  owned  by 
any  individual.  The  replacement  of  the  tool  by  the 
machine  transformed  the  tool-using,  skilled  mechanic 
into  a  semi-skilled  machine  tender,  whose  duty  con- 
sists in  seeing  that  the  machine,  which  his  employer 
owns,  does  its  work  well.  No  one  would  for  a  moment 
suggest  that  individual  workmanship  has  disappeared 
from  industry.  Neither  can  any  one  who  is  familiar 
with  industrial  conditions  fail  to  realize  that  the  large 
proportion  of  factory  operatives  are  merely  subordi- 
nates, working  side  by  side  with  their  pace-setting 
superiors, — the  machines. 

Hand-craft  industry  could  be  carried  on  by  one 
man  in  his  home  or  in  his  shop.  Factory  industry  is 
carried  on  by  large  groups  of  men  working  together  in 
great  establishments.  A  great  establishment  is  im- 
possible without  a  wide  market  for  the  goods  pro- 
duced. Once  this  market  is  secured,  however,  the 
great  establishment  becomes  inevitable. 

4.  THE  CONCENTRATION  OF  PEOPLE — CITY  LIFE 
With  the  exception  of  commercial  cities,  the  old- 
time  town  depended  very  largely  for  its  prosperity 
upon  the  surrounding  agricultural  districts.  Farmers 
raised  their  products,  brought  them  to  town  and  ex- 
changed them  for  the  groceries,  or  other  store  goods, 
that  they  needed.  In  this  way  the  large  town  and  the 
small  city  grew  up  on  a  basis  of  rural  prosperity. 


CHANGING  FOEM  OF  AMEKICAN  LIFE    45 

The  city  life  of  the  twentieth  century  is  essentially 
industrial.  It  is  built,  not  upon  the  prosperity  of 
neighboring  rural  communities,  but  upon  its  own  in- 
dustrial success. 

The  change  from  dependence  upon  an  outlying  rural 
district  to  internal  industrial  activity  has  transformed 
the  city.  Twentieth  century  city  life  is  centered 
about  factory  industry.  As  factories  grow  in  size  and 
number,  industrial  cities  grow.  Whatever  the  limit 
of  industrial  development  may  be,  it  has  not  yet  been 
determined.  Until  it  is  determined,  cities  will  con- 
tinue to  grow  in  size,  with  the  growth  of  the  industries 
upon  which  they  depend.  The  concentration  of  city 
population  will  be  constantly  accelerated  by  the  con- 
centration of  industrial  enterprises. 

5.  THE  MOVEMENT  TO  CITIES 
Men  realize  with  difficulty  the  extent  to  which 
American  life  has  been  transformed  in  a  little  more 
than  a  century.  In  1790  there  were  in  the  United 
States  six  cities  with  over  eight  thousand  inhabitants. 
In  these  cities  lived  about  one  hundred  and  thirty 
thousand  souls,  or  about  three  per  cent,  of  the  total 
population.  In  1910,  of  the  92,000,000  people  in  the 
United  States,  nearly  one  in  ten  lived  in  the  three 
cities  of  New  York,  Chicago,  and  Philadelphia  ;  one 
in  three  lived  in  some  large  urban  district ;  and  one 
in  two  (fifty-five  per  cent.)  lived  in  incorporated  vil- 
lages, towns,  and  cities.  The  United  States  is  becom- 
ing a  country  of  city  dwellers. 

Since  there  is  as  yet  no  clear  limit  to  the  increase  in 
industrial  concentration,  there  is  no  apparent  limit  to 


46         EEDUCING  THE  COST  OF  LIVING 

the  increase  in  city  population.  Some  portion  of  the 
population  must  remain  on  the  laud  to  provide  the 
food  supply.  As  mechanical  machinery  is  improved 
this  proportion  may  grow  constantly  less,  while  the 
great  stream  of  immigration  carries  men  almost  ex- 
clusively into  the  industrial  city  life. 

The  cost  of  living  problem  is  in  certain  respects  a 
city  problem.  It  is  because  men  must  live  in  cities 
that  they  have  left  their  kitchen  gardens  and  their 
simple  rural  ways.  It  is  in  large  measure  because 
men  live  in  cities  that  their  food,  for  which  the  ordi- 
nary man  spends  two-fifths  of  his  income,  must  be  pro- 
duced in  rural  districts,  and  shipped  to  urban  centers. 
The  life  problem  of  the  cities  arises  out  of  the  fact  that 
people  are  living  together.  The  more  coherent  their 
social  activity,  the  more  satisfactory  will  their  living  be. 

6.  THE  FAMILY  AS  THE  SOCIAL  UNIT 
Family  life  lies  at  the  basis  of  the  cost  of  living 
problem,  because  the  family  is  the  consuming  unit  in 
modern  society.  Presided  over  by  a  woman  who  pur- 
chases the  food,  the  family  is  the  ultimate  destination 
for  which  most  consumable  things  are  produced. 
There  are  to  this  general  statement  a  number  of  no- 
table exceptions.  The  spread  of  hotel  life  decreases 
the  importance  of  the  family  as  a  consuming  unit. 
The  tendency  of  individuals  to  keep  "  bachelor  apart- 
ments" decreases  the  potency  of  family  control.  All 
in  all,  however,  the  family  is  still  the  consuming  unit 
in  society.  Of  prime  interest,  therefore,  is  the  ques- 
tion, "What  type  of  family  confronts  the  cost  of 
living  in  the  twentieth  century  I " 


CHANGING  FORM  OF  AMERICAN  LIFE    47 

The  rural  life,  so  prevalent  in  the  early  nineteenth 
century,  is  fast  disappearing  in  the  twentieth.  Self- 
sufficiency  and  economic  independence  are  giving  way 
before  cooperation.  The  twentieth  century  is  the 
century  of  the  city,  of  big  business,  of  wage-earners, 
of  machinery,  of  factories,  and  of  economic  interde- 
pendence. 

Rural  life  remains,  of  course.  There  are  more  in- 
dividuals engaged  in  the  agricultural  business  than  in 
any  single  form  of  business.  Rural  free  deliveries, 
telephones,  automobiles,  interurban  trolleys,  express 
trains,  daily,  weekly  and  monthly  papers,  phono- 
graphs, and  improvements  in  educational  devices, 
have  socialized  farm  life  by  giving  it  a  solidarity  of 
its  own,  at  the  same  time  linking  it  to  the  world.  The 
farmer  as  a  seller  and  buyer  is  no  longer  dependent 
upon  his  own  products  for  a  living.  He,  too,  is  fac- 
tory-fed, clothed  and  entertained.  Thus  has  the 
factory  system  of  production  revolutionized  even  rural 
life. 

The  interest  of  the  present  study  centers,  however, 
primarily  around  the  city  family,  because  it  is  in  the 
city  that  the  new  civilization  will  stand  or  fall.  The 
city  family  is  the  family  of  the  future.  It  is  the 
family  which  the  twentieth  century  must  unify  and 
re-create  to  meet  the  new  type  of  needs  which  the  last 
hundred  years  have  evolved. 

The  changes  in  family  life  which  have  been  wrought 
during  a  century  are  revolutionary  in  the  last  degree. 
The  characteristics  of  the  nineteenth  century  family 
were, — economic  solidarity,  division  of  occupations, 
economic  independence,  and  independence  of  prices. 


48         EEDUCING  THE  COST  OF  LIVING 

Each  one  of  these  characteristics  was  an  economic  asset 
of  considerable  importance  in  freeing  the  family  from 
the  burdens  now  imposed  by  rising  prices. 

The  economic  solidarity  of  the  family  was  based 
upon  division  of  labor  and  resulted  in  economic  inde- 
pendence. Each  member  of  this  family  was  necessary 
to  the  economic  well-being  of  the  family  group. 
Hence  the  entire  family  was  bound  together  by  eco- 
nomic ties  of  the  strongest  character.  The  father 
had  his  work  in  connection  with  the  shop,  the  farm, 
or  the  store.  As  manufacturer,  husbandman,  wood- 
cutter, or  tradesman,  he  had  an  occupation,  which, 
while  yielding  him  an  income,  permitted  him  at  the 
same  time  to  carry  on  his  work  in  close  connection 
with  the  family  life.  The  mother  likewise  had  her 
definite  service  in  connection  with  domestic  economy. 
She  was  responsible  for  making  clothes,  for  cooking, 
preserving,  washing,  and  caring  for  the  house.  Some- 
times, in  addition  to  these  regular  duties,  she  assisted 
the  father  by  spinning  or  carding,  tending  the  do- 
mestic animals,  or  caring  for  the  kitchen  garden.  At 
all  events,  she,  too,  had  a  group  of  occupations  very 
different  in  character  from  those  of  her  husband,  and 
absolutely  essential  to  the  continuance  of  the  home. 

These  home  occupations  were  something  more  than 
occupations,  however,  since  they  gave  the  parents  an 
unrivaled  opportunity  to  educate  their  children  by  the 
practical  doing  of  things.  Etiral  life  abounds  in 
chores.  There  are  scores  of  tasks  every  day  in  which 
boys  can  assist  their  father,  and  girls  their  mother. 
The  division  of  occupations  in  the  home  thus  gave  an 
opportunity  for  the  employment  of  children  under 


CHANGING  FOEM  OF  AMEEICAN  LIFE    49 

home  supervision,  which  furnished  an  excellent  train- 
ing-ground, at  the  same  time  giving  the  child  a  definite 
place  in  the  economic  life  of  home. 

This  economic  solidarity,  based  on  division  of  labor, 
gave  the  family  a  most  complete  independence  from 
outside  sources.  Making  their  own  products  and  con- 
suming the  things  which  they  made,  they  were  able  to 
dispense  with  money  income,  and  with  the  necessity 
for  purchasing  commodities.  Eeceiving  and  spending 
little  money,  largely  independent  of  outside  sources  of 
supply,  the  prices  of  goods  made  little  real  difference 
to  family  welfare. 

With  this  self-sufficient  family  of  the  early  nine- 
teenth century  contrast  the  industrial  family  of  the 
twentieth  century.  This  family  is,  in  the  first  place, 
dependent  largely  on  money  income  for  its  support. 
Living  in  towns  and  cities, — cut  off,  therefore,  from 
most  sources  of  secondary  income, — engaged  in  occupa- 
tions outside  of  the  home  which  do  not  yield  any  direct 
return  in  the  form  of  economic  goods,  the  twentieth 
century  family,  instead  of  being  a  producer  of  its  own 
consumption  goods,  has  become  a  consumer  of  con- 
sumption goods  produced  by  others.  The  nineteenth 
century  family  was  a  potential  seller,  because  it  was  a 
producer  of  goods  which  it  might  consume.  The 
twentieth  century  family,  on  the  contrary,  is  a  potential 
buyer,  because  it  is  dependent  absolutely  on  the 
purchase  of  goods  produced  by  some  one  else.  The 
change  from  potential  seller  to  potential  buyer  means 
not  only  economic  dependence,  but  it  necessarily  means 
high  prices.  The  potential  buyer  must  pay  for  the 
product  which  he  obtains,  the  cost  of  production,  plus 


50         REDUCING  THE  COST  OF  LIVING 

at  least  a  reasonable  profit,  and  under  prevailing 
economic  conditions,  a  handsome  monopoly  as  well. 
Take  knitting  as  an  example.  Any  middle-aged 
person  will  remember  distinctly  the  click  of  knitting- 
needles  in  some  one's  else  living-room.  Perhaps  the 
mother,  and  certainly  the  grandmother,  occupied  her 
spare  moments  in  knitting  mittens,  socks  and  caps. 
To-day,  however,  knitting-needles  are  almost  never 
seen.  Neither  the  grammar  nor  the  high  school 
graduate  is  taught  to  use  tools  which  two  generations 
ago  were  considered  an  indispensable  part  of  the  equip- 
ment of  every  home.  On  the  other  hand,  the  hosiery 
and  knit-goods  factory  industry  has  grown  with  as- 
tonishing rapidity,  until  in  1909,  in  the  state  of 
Pennsylvania  alone  40,248  persons,  assisted  by  ma- 
chinery aggregating  22,000  horse-power,  are  engaged 
in  the  manufacture  of  fifty  million  dollars'  worth  of 
knit  goods  annually.  Knitting,  together  with  a 
hundred  other  eighteenth -century  crafts,  has  become 
a  factory  industry. 

This  transference  of  occupations  from  the  home  to  the 
factory  converts  the  home  into  a  buying  rather  than  a 
producing  unit.  When  grandmother  knit  the  socks 
the  family  had  them  at  cost.  When  the  machine  knits 
them,  the  rent,  interest,  wages  and  profits  of  the  factory 
must  be  added  to  the  cost  of  the  materials  before  the 
final  price  is  made.  Grandmother  knit  in  spare 
minutes,  or  at  a  time  of  life  when  she  was  unfitted  for 
more  strenuous  labor,  for  her  knitting  was  a  secondary 
occupation  or  a  pastime.  The  factory  employees,  old 
and  young,  knit  for  a  living.  Knitting  is  their  trade, 
and  they  must  be  paid  accordingly. 


CHANGING  FORM  OF  AMERICAN  LIFE    51 

7.  THE  FAMILY  AS  A  BUYER 
This  new  family  status, — the  family  as  a  buyer 
rather  than  as  a  seller, — is  aii  inevitable  accompani- 
ment of  twentieth  century  civilization.  Society  has 
set  its  stamp  of  approval  on  modern  industrialism. 
Industrialism  means  life  in  towns  and  cities.  The  sole 
avenue  of  wholesome  city  life  is  a  radical  readjustment 
of  family  relations  which  will  permit  the  family  to 
occupy  its  new  economic  position  to  the  advantage  of 
all  concerned. 

The  nineteenth  century  family  was  a  producing, 
selling,  largely  self-sufficient  family.  The  twentieth 
century  family  is  a  consuming,  income-earning,  buy- 
ing family,  dependent  for  its  continuance  upon  the 
economic  activities  of  hundreds  of  thousands  of  other 
families.  Selling  was  incidental  to  the  life  of  the 
nineteenth  century  family.  Even  if  markets  were 
closed  tight,  it  could  survive.  The  twentieth  century 
family  must  always  earn,  because  it  is  under  the  con- 
stant necessity  of  buying.  The  prime  requirement 
for  the  survival  of  the  old  family  was  production  ;  the 
prime  necessity  of  the  new  one  is  purchasing  power. 
To  meet  this  new  need,  there  must  be  developed  a  high 
type  of  city  family  with  income  sufficiently  augmented 
to  purchase  the  livelihood  which  the  old  family  created 
for  itself. 


IV 

THE  INCREASING  DEMAND  FOE  SEEVICES 

1.     "IF  You  WOULD  HAVE  A  THING  WELL 
DONE " 

THE  first  issue  which  the  student  of  the  cost  of  living 
must  face  has  to  do  with  the  rising  standard  of  life 
that  has  paralleled  the  transformation  of  society  from 
an  agricultural,  village  life,  to  an  industrial  city  life. 
The  increasing  scale  of  comforts  and  luxuries,  the  ad- 
vancing ideas  regarding  the  "necessaries  of  life,"  and 
the  intense  struggle  to  "get  ahead,"  are  all  involved 
in  the  question  of  rising  standards.  ' '  The  transforma- 
tion of  society"  is  an  abstract  term,  but  its  practical 
connotations  are  legion. 

Among  the  changes  which  the  past  century  has 
wrought,  none  is  more  poignant  than  the  increasing 
demand  for  services.  "If  you  would  have  a  thing 
well  done,  do  it  yourself,"  wrote  the  sage.  Out  of  the 
wilderness  of  primitive  ideas  and  of  an  undeveloped 
civilization,  he  admonished  mankind  to  insure  satisfac- 
tion by  relying  upon  personal  resources. 

During  the  years  that  have  intervened  since  the  sage 
expressed  his  estimate  of  personally  wrought  service, 
civilization  has  advanced  by  leaps  and  bounds.  As 
civilizations  grow  up,  man  learns  to  seek  for  satisfac- 
tion from  two  objective  forces, — goods  and  services. 


INCREASING  DEMAND  FOE  SERVICES    53 

In  the  case  of  both  goods  and  services,  man  may  rely 
on  his  own  energy  or  he  may  look  to  others  for  the 
supply. 

Civilization  means  an  increase  in  the  proportion  of 
goods  and  services  which  come  from  other  people.  As 
society  advances  in  its  development,  increasing  the 
while  in  numbers,  men's  relations  with  each  other 
become  more  and  more  complex.  From  this  time  forth 
and  forever,  men  will  work  and  live  together  in  social 
groups.  Therefore  they  will  be  dependent  on  one 
another  for  the  things  which  they  need  and  for  the 
services  which  they  require. 

There  is  no  real  sense  in  which  a  twentieth  century 
man  may  serve  himself.  Cooperation  lies  at  the  basis 
of  modern  social  life. 

Cooperation — mutual  service — reduces  the  cost  of 
living  by  enabling  each  person  to  secure  a  more  abun- 
dant return  for  a  given  outlay  of  energy.  Each  man 
learns  his  own  task  thoroughly.  Each  depends,  for 
the  things  he  needs,  on  a  group  of  individuals,  each 
one  of  whom  has  mastered  a  particular  job.  There  is, 
however,  a  time  in  which  a  dependence  on  services 
involves  an  increase  in  the  cost  of  living.  It  is  for  this 
reason  that  the  matter  is  taken  under  consideration. 

2.     LET  PETER  Do  IT 

A  man  may  ply  his  trade,  and  by  exchanging  the 
products  of  his  energy  for  the  products  of  another, 
he  may  increase  the  bounds  of  his  life  enjoyments. 
He  may,  on  the  other  hand,  lay  down  the  hire  of  la- 
borers, and  stand  idly  by  while  some  other  does  the 
work  from  which  he  expects  to  reap  the  reward.  This 


54          REDUCING  THE  COST  OF  LIVING 

matter  of  letting  Peter  do  it  is  one  great  cause  of  the 
increased  cost  of  living  among  the  well-to-do. 

First  there  are  the  things  which  no  person  can  do 
and  remain  a  lady  or  a  gentleman.  Among  the  rude 
settlers  of  America,  during  the  eighteenth  century, 
these  things  included  all  acts  which  soil  the  conscience 
or  destroy  the  good  name.  In  present-day  well-to-do 
society,  they  include  those  tasks  which  will  soil  the 
hands  or  destroy  the  crease  in  one's  trousers. 

Many  forces  are  at  work  to  counteract  this  spirit  of 
social  snobbery.  Country  life,  vacations,  athletics  and 
college  all  play  their  part  in  democratizing  men  and 
women  to  a  point  where  they  are  willing  to  do  any- 
thing,— at  college.  Nevertheless,  when  they  get  back 
into  the  straight-jacket  of  formal  life  at  home,  they 
distinguish  sharply  between  "  servant's  work  "  and 
work  that  a  lady  or  a  gentleman  can  do.  There  is 
many  a  small  town  and  many  a  fine  suburb  where  these 
lines  are  sharply  drawn  and  woe  to  any  one  bold 
enough  to  transgress  them  and  "  spoil  the  servants." 

The  same  thought  finds  expression  in  another  form. 
Whenever  a  discussion  turns  on  an  issue  of  social  re- 
organization, someone  inevitably  remarks, — "That's 
all  right,  but  then  there  is  always  work  that  some  one 
must  do,"  or  "  Who  would  do  the  dirty  work  ?  "  Cer- 
tainly the  well-to-do  have  no  intention  of  doing  it, 
and  their  children,  graduating  from  high  school  or  col- 
lege, are  looking  forward  to  the  pleasant,  clean,  gen- 
tlemanly positions.  If  there  must  be  scavengers,  they 
certainly  will  not  come  from  one  of  these  families. 
What  well-to-do  mother  would  contemplate  factory 
work  for  her  daughter?  Well-to-do  girls  use  dress 


INCREASING  DEMAND  FOE  SERVICES    56 

goods  and  shoes  made  by  other  women  who  work  in 
factories,  but  they  themselves  are  far  above  factory 
work.  They  have  been  brought  up  to  believe  that 
they  should  pay  some  one  else  to  do  such  things. 

The  well-to-do  hope  to  hire  done  everything  that 
they  dislike  to  do  themselves.  Their  conception  of 
life  is  not  one  that  involves  the  exchange  of  product 
for  product  and  of  service  for  service.  Rather,  out  of 
their  income — derived  it  matters  not  how — they  are 
planning  to  hire  Peter  to  do  it. 

The  same  spirit  finds  its  expression  in  many  another 
form.  Why  play  baseball  if  a  half  dollar  will  hire 
some  one  to  play  for  you?  Why  compel  children  to 
study  in  a  public  school  if  they  may  be  sent  to  private 
school  where  a  teacher  will  "  help  out "  ?  Profession- 
alized athletics  and  vicarious  education  are  the  logical 
outcome  of  such  an  attitude.  Men  let  Peter  do  it,  not 
realizing  that  mere  ability  to  pay  will  neither  bear 
the  burden  thus  laid  on  Peter,  nor  prove  an  adequate 
substitute  for  the  spiritual  loss  to  the  shirker  of  re- 
sponsibility. 

3.    THE  NEAR- GRAFT  SPIRIT 

The  hope  of  something  for  nothing,  the  chance  of 

buying  life  in  return  for  a  money  compensation,  the 

search  for  a  bargain  in  enjoyments  and  satisfactions 

has  allured  the  world  for  ages.     The  philosopher's 

stone,  the  spring  of  eternal  youth  and  the  apple  of  life 

have  been  sought  by  countless  thousands.     To-day, 

pursuant  of  the  same  philosophy,  men  put  it  off  on 

Peter. 

There  is  a  fond  hope,  lingering  in  the  human  heart, 


56         REDUCING  THE  COST  OF  LIVING 

that  in  some  way  Peter  will  be  able  to  do  it  for  them. 
Why  not !  Has  he  not  been  liberally  compensated  for 
his  services  ?  Yes,  that  is  true  enough,  but  can  one's 
life  be  lived  by  another  ? 

Meanwhile,  the  well-to-do  gather  servants  around 
them,  and  pay  for  more  and  more  services  in  the  hope 
that  life  may  after  all  be  found  in  that  way.  In  any 
case,  they  would  hardly  be  expected  to  fetch  and  carry 
themselves !  So  the  tasks  of  the  well-to-do  are  piled 
on  Peter's  well-loaded  .back  and  the  cost  of  living  rises 
as  the  amount  of  service  comprised  in  "living  "in- 
creases. 

4.  THE  MINIMUM  OF  SERVICE  IN  RURAL  LIFE 
Some  idea  of  the  distance  which  the  well-to-do  have 
traveled  in  their  demand  for  service  may  be  gained  by 
contrasting  the  conditions  now  existing  in  rural  and  in 
city  life.  In  the  country,  each  man  is  more  his  own 
master  and  less  some  one's  man.  The  farmer,  to  a 
very  large  degree,  serves  himself. 

When  our  ancestors,  in  early  colonial  times,  lived 
in  small  villages  and  in  rural  districts,  they  were  their 
own  servants  and  gloried  in  the  fact.  They  were  able 
to  serve  themselves  and  the  capacity  for  self-service 
was  a  source  of  pride  and  satisfaction.  The  movement 
into  large  towns  and  cities  overthrew  the  self-service 
idea  in  many  of  its  forms.  Families  ceased  to  provide 
themselves  with  the  necessaries  of  life.  The  milkman 
called  ;  the  baker  called  ;  the  huckster  called.  Fam- 
ilies patronized  cows  they  neither  owned  nor  milked  ; 
they  ate  bread  baked  in  the  oven  of  another  ;  and  as 
for  the  truck-patch  in  which  they  had  always  taken 


INCBEASING  DEMAND  FOE  SEEVICES    57 

such  pride,  it  was  a  thing  of  the  country  and  of  the 
past. 

As  towns  and  cities  grew,  services  multiplied. 
There  were  not  only  the  numerous  tradesmen  who 
supplied  the  things  formerly  made  at  home,  but  there 
were  public  service  corporations  who  pumped  the 
water,  sent  in  the  gas  and  carried  passengers  on  the 
street  railway.  Upon  these  services  the  city  folk 
depend  for  their  existence. 

City  life  also  develops  servants  and  servant  types. 
The  hired  man  or  hired  girl  in  the  country  were  son 
and  daughter  of  a  neighboring  farmer,  or  else  they 
were  "from  over  across  the  hill."  The  city  servants 
in  the  United  States  are  ordinarily  of  another  race  and 
of  another  caste.  They  are  servants,  eating  down- 
stairs, wearing  servant  liveries,  ordered  about  and 
treated  as  servants,  and  in  every  way  looked  upon  as 
inferior  to  the  masters  for  whom  they  work. 

The  city  man  is  not  only  dependent  upon  others  for 
the  services  which  he  requires,  but  he  is  dependent  on 
a  group  of  servants  who  are  distinctly  servile  in  their 
attitude  toward  him.  He  is  the  master  and  they  are 
''different." 

5.  THE  SUBSTITUTION  OF  SERVILITY  FOR  MANHOOD 
Manhood  is  a  matter  of  equality.  The  phrase, 
"  He  is  a  man,"  carries  with  it  admiration  and  respect. 
There  need  be  no  friendship,  no  acquaintance,  no  in- 
timate knowledge  of  the  person  in  question.  If  he 
stands  straight  and  looks  one  directly  in  the  eye,  he 
is  a  man.  Men  respect  those  who  are  proved  equals. 
Whether  in  a  bout  at  arms,  a  play  of  wits  or  merely 


58         EEDUCING  THE  COST  OF  LIVING 

in  appearance  and  dress,  equality  is  a  prerequisite 
of  friendly  recognition.  Birth,  physical  beauty  or 
strength,  mental  acumen,  position, — all  of  these 
things  and  many  more,  in  terms  of  which  the  world 
judges  equality  or  inequality,  place  men  on  a  footing. 

The  city  servant  has  nothing  in  common  with  his 
master  except  their  common  manhood.  He  must  be 
respectful.  He  must  know  and  keep  his  place.  Be- 
longing as  he  does,  in  a  different  class,  he  need  never 
expect  to  regard  himself  as  in  any  other  class. 

Masters  are  kind  to  their  servants.  They  are  con- 
siderate, thoughtful,  sympathetic.  They  exercise 
toward  them  all  of  the  forbearance  that  they  would 
exercise  toward  the  most  cherished  friend.  Yet  they 
regard  them .  as  servants,  a  fact  which  it  behooves  the 
servants  under  all  circumstances  to  remember. 

Since  servants  are  "servants,"  they  cannot  be 
equals.  Under  such  circumstances,  democracy  is  im- 
possible. One  thing  alone  remains, — a  relation  of 
superior  and  inferior,  of  higher  and  of  lower  that  es- 
tablishes a  servant  problem. 

6.    THE  SERVANT  PROBLEM 

The  servant  problem  is  acute  among  the  well-to-do 
women  who  marry.  They  are  frequently  ignorant  of 
housework,  and  they  must  rely  upon  servants.  Per- 
haps they  are  thoroughly  acquainted  with  domestic 
science  and  art,  still  none  of  the  neighbors  does  her  own 
work  ;  why  should  they  ?  On  the  other  hand,  many 
women  have  avocations  or  vocations  which  they  con- 
tinue after  they  are  married.  To  such,  the  housework 
is  a  mere  incident,  which  they  gladly  leave  to  servants. 


INCREASING  DEMAND  FOE  SERVICES    59 

Meanwhile,  the  entrance  of  women  into  factory  and 
store  has  drained  the  market  of  many  of  the  women 
who  otherwise  would  be  servants.  They  prefer  to 
work  in  the  store,  where  they  are  on  a  basis  of  equal- 
ity with  their  employers.  There  is  in  the  store  and 
the  factory  work  no  taint  of  servility.  Even  though 
it  pays  less  than  domestic  science,  it  is  preferable. 
The  demand  for  domestic  servants  increases  with  the 
increase  in  the  number  of  well-to-do  families.  The 
supply  of  women  who  will  do  domestic  work  is  cut 
down  by  the  demand  of  industry.  Consequently  there 
is  an  unsupplied  demand  for  good  "help  "  which  is  a 
source  of  continued  aggravation  to  the  housewife  and 
which  constitutes  the  real  domestic  servant  problem. 
The  most  independent  girls  will  not  enter  the  servile 
atmosphere  of  the  kitchen. 

This  situation  leads  to  an  interesting  paradox.  The 
servant  becomes  master  despite  her  servility.  The 
mistress  continues  to  regard  her  as  an  inferior. 
She  looks  upon  her  as  an  individual  who  belongs  in 
a  lower  stratum  of  society.  Nevertheless,  the  girl 
servant  is  in  a  position  to  command  because  girl  serv- 
ants are  so  hard  to  find. 

The  burden  of  servants  is  carried  by  masters  and 
mistresses.  There  are  instances,  numerous  enough, 
in  which  a  mistress  would  expend  less  effort  in  doing 
work  herself  than  she  expends  in  the  supervision  of 
her  servants.  To  such  persons,  the  hiring  of  an  ad- 
ditional servant  always  signifies  the  assumption  of  an 
additional  burden. 

The  hope  for  the  future  seems  to  lie  in  the  abolition 
of  "servants."  Servility  and  democracy  are  incom- 


60         EEDUCING  THE  COST  OF  LIVING 

patible.  Since  the  tendency  of  the  time  is  strongly 
toward  democracy,  servility  lies  in  the  past, — not  in 
the  future.  The  diminution  in  the  number  of  domestic 
servants  does  not  involve  a  decrease  in  the  amount  of 
services.  Indeed,  the  apartment  houses  and  family 
hotels  in  which  service  abounds  are  in  many  cases 
free  of  servants.  Finally  a  man's  servant  will  be  as 
much  his  equal  as  his  bookkeeper  or  his  head  sales- 
man is  his  equal.  Science  has  cleared  away  the  tra- 
ditions of  differences  in  mankind.  It  remains  for 
social  reorganization  to  complete  the  work  which 
science  has  so  ably  begun. 

7.  PUBLIC,  PERSONAL  SERVICES 
The  newer  aspects  of  the  problem  of  service  appear 
in  the  service  which  is  rendered  publicly,  either  free, 
like  the  service  rendered  by  the  city  government  in 
the  form  of  fire  protection,  or  for  hire,  like  the  service 
rendered  by  actors  in  providing  public  amusement. 
Both  forms  of  service  are  free  of  the  servility  attach- 
ing to  domestic  service.  Both  are  increasing  at  an 
extravagant  rate. 

The  free  public  services  rendered  by  the  government 
are  an  accompaniment  of  the  congested  living  which 
the  present  day  city  involves.  City  life  leads  to  a 
multitude  of  public  services  for  which  the  home  was 
formerly  responsible.  The  home  at  one  time  provided 
almost  all  of  the  amusement  for  the  members  of  the 
family.  For  that  amusement  the  family  now  turns 
to  the  amusement  and  recreation  places  which  abound 
in  every  center  of  population.  There  was  a  time  when 
people  went  to  lunch  at  their  own  homes.  The  growth 


INCREASING  DEMAND  FOE  SEEVICES    61 

of  city  life  has  made  such  a  practice  unusual,  hence 
lunch  rooms  are  opened  on  a  vast  scale.  No  blame 
attaches  to  the  home  for  its  failure  to  provide  amuse- 
ment and  lunches.  The  change  underlies  city  life. 

Every  one  in  the  city  accepts  public  assistance,  and 
as  a  matter  of  course,  uses  public  property.  The 
streets,  the  parks,  the  schools  are  thought  of,  not  as 
"charity,"  but  as  the  due  return  which  the  citizen 
may  expect  from  his  city.  Social  service  has  in  no 
sense  demoralized  men  and  women  by  lowering  their 
self-respect,  but  it  has  increased  public  expenses  vastly. 

8.  THE  INCREASE  IN  SERVICE  OCCUPATIONS 
Despite  the  failure  of  the  classical  economists  to 
make  good  their  distinction  between  productive  and 
unproductive  labor,  there  is,  in  the  contrast,  an  element 
which  is  worthy  of  serious  consideration.  There  is  a 
kind  of  labor  which  provides  the  food,  clothing,  and 
shelter  upon  which  all  depend  for  their  existence. 
There  is  another  kind  of  labor  which  is  occupied  in 
providing  society  with  the  comforts  and  luxuries  of 
life.  The  first  class  of  labor  is  absolutely  essential  in 
any  community.  The  presence  of  the  second  class 
ordinarily  denotes  a  more  or  less  advanced  state  of  civi- 
lization. While  not  essential  to  physical  existence,  it 
yields  those  returns  which  convert  mere  existence  into 
life.  Labor  engaged  in  the  production  of  comforts 
and  luxuries  is  a  vital  factor  in  civilization,  but  it 
cannot  be  increased  unduly  at  the  expense  of  that 
labor  which  is  engaged  in  the  production  of  necessaries. 
Although  this  argument  may  sound  highly  theo- 
retical, it  has  practical  bearing  of  the  most  extreme 


62         KEDUCING  THE  COST  OF  LIVING 

importance.  Here  was  a  farm  owner,  who  after  trying 
general  farming  for  several  years,  and  being  unable  to 
make  ends  meet,  had  turned  to  the  growing  of  flowers 
for  the  New  York  market. 

"It  was  no  use,"  he  said.  "I  gave  it  a  thorough 
try-out,  and  couldn't  make  expenses.  On  these  flowers 
I  clear  a  handsome  profit." 

The  flowers,  while  very  beautiful,  were  luxuries. 
The  corn  and  potatoes  which  this  farm  might  have 
grown,  ceased  to  be  and  with  them  there  disappeared  a 
part  of  the  supply  of  food  upon  which  the  community 
depends  for  its  existence. 

To  what  extent  this  illustration  is  typical ;  to  what 
extent  mushrooms  have  replaced  wheat,  and  fancy 
fruits  standard  vegetables,  no  one  can  say.  The  change 
is  occurring  here  and  there.  If  it  becomes  general, 
its  effect  on  prices  of  staple  farm  products  will  be 
marked. 

There  are  numerous  industries  beside  agriculture  in 
which  a  similar  transformation  is  taking  place.  The 
railroad  hand  is  taken  from  the  section  crew,  where  he 
kept  the  road-bed  in  repair,  garbed  in  a  red  hat,  and 
posted  in  the  station  as  a  "porter  "  ;  the  janitor  dons 
a  uniform,  stands  in  front  of  the  department  store,  and 
opens  the  doors  of  arriving  automobiles  ;  the  big  hotels 
are  alive  with  flunkies  whose  sole  duty  in  life  is  to  see 
that  patrons  are  given  no  opportunity  to  help  them- 
selves ;  hundreds  of  thousands  of  men  and  women  have 
entered  the  teaching  profession  ;  middlemen  abound  ; 
every  great  industrial  center  carries  in  its  wake  a  mob 
of  camp-followers  who,  in  some  more  or  less  obtrusive 
manner,  graft  on  the  workers. 


INCREASING  DEMAND  FOE  SEEVICES    63 

With  perfect  justice  it  is  argued  that  these  servants 
increase  human  happiness.  There  is  no  doubt  that  the 
vaudeville  performance,  the  grand  opera,  the  up-stairs 
maid,  the  polite  floor- walker,  and  the  assiduous  school- 
teacher increase  human  happiness.  They  may  also  in- 
crease human  efficiency.  Neither  of  those  facts,  how- 
ever, has  any  bearing  upon  the  statement  that  they  are 
not  engaged  directly  in  producing  the  necessaries  of  life. 

This  oft-reiterated  statement  regarding  the  increase 
in  the  amount  of  luxury-producing  labor  is  always  met 
by  the  answer, — "to  be  sure  the  proportion  of  pro- 
ductive labor  is  decreasing.  That  decrease  is  made 
possible  by  the  use  of  machinery  and  the  augmented 
efficiency  of  labor.  There  are  fewer  laborers  but  they 
produce  much  more  than  they  did  formerly." 

That  statement  may  or  may  not  be  true.  The  de- 
velopment of  machinery  has  unquestionably  been 
phenomenal.  Whether  this  development  has  been 
in  proportion  to  the  decrease  in  productive  labor  re- 
mains to  be  seen.  Meanwhile,  it  is  well  to  bear  in 
mind  the  fact  that  a  whole  line  of  industries  are 
engaged  in  making  the  machines  which  relieve  the 
laborer,  and  that  all  of  the  people  in  these  industries 
must  be  fed,  clothed  and  housed  by  the  producers  of 
food,  clothing  and  housing. 

While  it  is  impossible  to  measure  the  relation  ex- 
isting between  the  saving  through  machinery  and  the 
loss  through  the  increasing  proportion  of  non- produc- 
ing labor  (and  it  is  beginning  to  look  as  though  the 
real  facts  had  been  covered  up  by  the  employment  at 
subsistence  wages  of  large  bodies  of  unskilled  im- 
migrants who  have  replaced  the  higher  Americans  in 


64         REDUCING  THE  COST  OF  LIVING 

many  of  the  producing  occupations)  there  can  be  little 
question  that  the  burden  of  producing  the  food,  cloth- 
ing, and  housing  for  the  people  of  the  United  States  has 
fallen  on  an  astonishingly  small  number  of  shoulders. 

9.    SERVICE  AND  GROUP  LIFE 

Service  is  essential  to  group  life.  Men  cannot  live 
together  unless  they  help  one  another.  The  specializa- 
tion which  makes  of  each  man  an  expert  and  gives  to 
each  a  work  which  he  must  perform  adds  greatly  to 
the  efficiency  of  the  group.  Each  receives  more  be- 
cause all  are  directing  the  efforts  in  the  interests  of 
each. 

Service  begets  service.  Only  in  its  own  coin  may 
service  be  repaid.  No  one  who  fails  to  contribute  a 
fair  share  to  the  work  of  the  world  has  a  right  to  ex- 
pect aught  save  emptiness  and  waste  in  return. 

The  unrest  of  the  well-to-do,  the  dissatisfaction 
with  the  returns  that  life  brings  them,  is  a  frank  rec- 
ognition of  this  one  thing, — that  life  cannot  be  bought 
for  any  less  price  than  that  of  service. 

The  immense  increase  in  the  number  of  services  for 
which  the  well-to-do  expect  to  pay  is  one  of  the  mov- 
ing forces  in  the  increasing  cost  of  living.  For  them, 
money  income  is  important  largely  because  it  will  en- 
able them  to  hire  some  one  to  do  the  unlovely  work  of 
the  world. 

10.    THE  DEMAND  FOE  SERVICES  AS  A  BURDEN  ON 
INCOME 

The  immense  increase  in  the  number  of  those  who 
are  rendering  personal  service  must  be  paid  for.  The 


INCREASING  DEMAND  FOE  SEEVICES    65 

actors,  ball  players,  telephone  operators,  railway  por- 
ters, bell-boys,  and  floor-walkers  expect  to  live.  They 
are  employed  to  render  service  to  the  well-to-do.  The 
recompense  for  this  service  is  added  to  the  mainte- 
nance bill  of  society. 

Simpler  forms  of  life  have  given  way  before  more 
complex  ones.  City  life  has  replaced  life  in  villages, 
towns  and  isolated  districts.  Increasing  complexity  of 
living  means,  among  other  things,  an  increase  of  serv- 
ice. Servility  in  service  is  menacing  as  well  as 
costly.  Service  from  equals  does  not  threaten  Demo- 
cratic institutions,  but  it  does  heap  up  the  costs  of 
maintaining  the  community.  Amusement  is  expen- 
sive. Entertainment  comes  at  high  prices  when  it  is 
provided  by  "  talent."  It  may  or  it  may  not  be  true 
that  men  have  more  amusement  and  entertainment  for 
the  additional  expenditure. 

For  the  most  part  this  unrequited  service  should  be 
classed  among  the  comforts  and  luxuries  of  life.  The 
well-to-do  believe  that  they  cannot  live  without  it,  but 
the  world  knows  better,  because  the  world  at  large 
does  live  without  it. 

The  world  must  learn  that  no  one  who  is  able  to 
serve  should  idle.  That  any  one  should  receive  a  return 
for  services  above  the  value  of  those  services  to  the 
world  seems  inethical  to  the  last  degree.  It  is  un- 
questionably vicious  in  its  effects  upon  the  idlers.  It 
is  no  less  expensive  to  society. 

Services  must  be  analyzed  and  treated  variously. 
Those  services  which  are  necessary  to  the  continuance 
of  group  life,  and  most  of  the  services  which  are 
performed  in  return  for  other  services,  will  continue  to 


66         KEDUCING  THE  COST  OF  LIVING 

increase  in  number  and  variety.  The  result  will  be 
increased  satisfactions  for  every  member  of  society. 
Those  services  which  are,  on  the  other  hand,  received, 
with  no  service  given  in  return,  constitute  an  obstacle 
to  social  progress  of  the  first  magnitude.  As  they  in- 
crease in  amount  they  fasten  themselves  as  a  perma- 
nent charge  in  the  living  costs  of  individuals  and  of 
society. 


THE  INCREASING  USE  OF  COMFORTS  AND 
LUXURIES 

1.    WHAT  ARE  LUXURIES? 

EACH  person  has  a  definition  of  luxuries  which  suits 
his  taste  and  his  position  in  life.  The  South  Sea  Is- 
lander regards  a  pair  of  trousers  as  a  luxury.  In  Lon- 
don they  become  a  necessity. 

The  three  words  which  are  most  usually  employed 
to  distinguish  various  kinds  of  goods  and  services  are 
"necessaries,"  "comforts,"  and  "luxuries."  Neces- 
saries are  those  things  which  are  required  to  maintain 
physical  efficiency.  They  include  the  essentials  of 
physical  upkeep,  such  as  simple  clothing,  plain  food, 
and  a  sanitary  dwelling.  Comforts  are  things  over 
and  above  necessaries,  which  may  be  very  generally 
possessed  by  people  throughout  the  community.  Re- 
productions of  good  pictures  are  not  necessary  to 
physical  efficiency  ;  they  may  be  cheaply  obtained, 
however,  and  a  house  possessed  of  them  is  said  to  be 
comfortably  furnished.  The  same  thing  may  be  said 
of  any  commodity  which  is  not  immediately  necessary 
for  efficiency,  and  yet  which  the  ordinary  man  of  fam- 
ily may  secure  if  they  so  desire.  Luxuries  are  things 
beyond  the  income  of  the  great  majority  of  people  in 
a  community.  A  grand  piano  is  a  luxury.  The  in- 
come of  the  ordinary  family  is  too  low  to  enable  it  to 
maintain  efficiency,  and  at  the  same  time  have  enough 


68         REDUCING  THE  COST  OF  LIVING 

surplus  to  purchase  a  grand  piano.  A  three-thousand 
dollar  automobile  is  a  luxury  for  the  same  reasons. 
Things  become  luxuries  when  they  pass  beyond  the 
income-reach  of  the  ordinary  man. 

Accepting  these  rather  arbitrary  distinctions  as  a 
working  basis,  it  becomes  apparent,  first  of  all,  that 
the  question  as  to  what  things  are  luxuries  changes 
rapidly  from,  one  period  to  another.  When  tapestries 
were  first  thrown  upon  the  floor  for  lords  and  ladies  to 
walk  upon,  carpets  were  a  luxury.  In  the  homes  of 
the  humble  there  were  no  floors  save  the  bare  earth. 
No  American  looks  upon  a  carpet  as  a  luxury.  There 
are  kinds  of  rare  carpets  which  are  luxuries,  but  car- 
pets as  floor  coverings  are  within  the  reach  of  every 
one.  Indeed,  a  house  without  carpets  is  generally  con- 
sidered below  the  standard  of  necessaries  which  any 
family  may  expect  to  maintain.  The  standard  of  lux- 
uries changes  because  of  improvements  on  the  methods 
of  producing  economic  goods. 

There  are  various  reasons  for  the  purchase  of  lux- 
uries. Some  people  buy  luxuries  because  they  yield 
comfort.  Some  people  find  in  luxuries,  such  as  ail 
objects,  the  satisfaction  of  some  taste.  Another  group 
of  people  buys  luxuries  because  it  is  the  thing  to  buy 
them,  and  they  buy  those  luxuries  which  are  in  style. 
Expensive  dresses  are  peculiarly  in  this  class.  Their 
value  is  only  temporary  ;  and  it  consists  not  in  their 
fit  or  their  comeliness,  but  in  their  likeness  to  the 
standard  of  a  particular  season. 

Luxuries  which  are  procured  because  they  satisfy  a 
certain  standard  of  fashion  or  style  are  peculiarly  sub- 
ject to  the  effects  of  competition.  Each  person  strives 


THE  INCREASING  USE  OF  COMFORTS     69 

to  set  a  standard  of  luxury  above  that  of  some  other 
person.  Each  aims  to  excel.  The  triumph  is  thus  in 
excelling  and  in  possession — not  in  the  intrinsic  worth 
of  the  thing  possessed. 

Under  such  circumstances,  the  standard  of  luxuries 
can  be  forced  up  at  a  terrific  pace.  No  one  need  enjoy 
what  he  has.  No  one  need  even  appreciate  the  lux- 
uries which  he  already  possesses.  He  must  have  as 
many,  or  more,  than  his  neighbor,  and  he  must  have 
them  as  new  or  newer  in  style  than  his  neighbor. 
This  competition  leads  to  a  contest  in  which  the  most 
liberal  spender  sets  the  pace.  Spending  depends  on 
income.  The  largest  income  supplies  the  most  lux- 
uries. The  pressure  is  intense.  The  competition  is 
keen.  Men  and  women  sacrifice  everything — even 
health — to  make  a  showing  which  is  on  a  par  with  that 
of  the  others.  The  weapons  in  this  fashion-contest  are 
the  luxuries  that  one  has  at  command. 

2.      ElBBONS  AND  LACE 

The  well-to-do  spend  vast  sums  on  luxuries.  In  a 
very  considerable  sense  their  social  position  depends 
upon  this  expenditure.  On  the  other  hand,  their  edu- 
cation has  led  them  to  expect  elaborate  menus,  fine 
clothes,  and  splendid  houses. 

The  time  has  come  when  a  very  considerable  amount 
of  labor  and  capital  is  engaged  in  the  production  of 
comforts  and  luxuries.  The  manufacture  of  pianos 
and  organs  necessitates  the  employment  of  41,882  per- 
sons, and  a  capital  outlay  of  $103,234,000  ;  the  manu- 
facture of  automobiles  has  enlisted  85,359  persons,  and 
a  capital  investment  of  $173,837,000  ;  the  capital  in- 


70         EEDUCING  THE  COST  OF  LIVING 

vested  in  the  silk  industry  is  $152,158,000,  and  the 
number  of  persons  employed,  105,238 ;  the  tobacco 
industry  employs  197,637,  and  involves  a  capital  out- 
lay of  $254,660,000  j  the  manufacture  of  all  kinds  of 
alcoholic  liquors  requires  77,779  persons,  and  is  cap- 
italized at  $771, 516, 000. 1  There  are  a  number  of  less 
important  industries  producing  such  luxuries  as  billiard 
tables,  artificial  flowers  and  feathers,  confectionery  and 
jewelry,  phonographs,  soda  water  apparatus,  and  the 
like.  Large  and  small  industries  alike  require  the  in- 
vestment of  capital,  and  the  employment  of  consider- 
able numbers  of  people.  The  exact  amount  expended 
for  luxuries  is  immaterial.  The  fact  of  the  expendi- 
ture is  alone  significant. 

The  labor  and  the  capital  which  are  engaged  in  the 
production  of  luxuries  obviously  cannot  be  engaged  in 
the  production  of  necessaries.  Were  the  available 
amount  of  labor  and  capital  unlimited,  there  could  be 
no  objection  to  diverting  it  into  any  desired  channels. 
Since  both  labor  and  capital,  at  any  given  time,  are 
definitely  limited  in  amount,  their  employment  in  one 
industry,  or  in  one  group  of  industries,  virtually  de- 
nies them  to  another. 

3.  THE  ^REDIRECTION  OF  PRODUCTIVE  ENTERPRISE 
There  are  in  America  to-day  numbers  of  people  who 
lack  the  simplest  necessaries  of  life.  They  have  the 
desire  to  secure  them.  Income  alone  is  lacking. 
When  a  readjustment  has  been  effected  which  will,  on 
the  one  hand,  provide  them  with  the  income,  and  on 

1  These  figures  are  taken  from  the  Census  of  Manufactures,  1909. 
See  Appendix  A. 


THE  INCREASING  USE  OF  COMFOETS     71 

the  other,  so  increase  the  production  of  necessaries 
that  these  people  may  have  an  opportunity  to  secure 
them,  it  will  be  time  to  concentrate  on  the  production 
of  luxuries.  That  time  has  not  yet  arrived. 

Euskin  insists,  and  with  some  apparent  show  of 
justice,  that  "in  due  time,  when  we  have  nothing 
better  to  set  people  to  work  at,  it  may  be  right  to  let 
them  make  lace  and  cut  jewels ;  but,  as  long  as  there 
are  any  who  have  no  blankets  for  their  beds,  and  no 
rags  for  their  bodies,  so  long  it  is  blanket-making  and 
tailoring  we  must  set  people  to  work  at — not  lace."  l 

The  growth  of  industries  devoted  exclusively  to  the 
production  of  comforts  and  luxuries,  in  full  view  of 
the  misery  and  wretchedness  which  begs  for  the  neces- 
saries of  life,  is  a  serious  charge  against  any  civiliza- 
tion. It  becomes  doubly  serious  when,  as  in  the  case 
of  the  automobile  industry  and  the  talking  machine 
industry,  this  production  of  comforts  and  luxuries  in- 
creases faster  than  the  production  of  life's  necessaries. 
To  be  sure,  these  are  new  industries.  At  the  same 
time  they  show  with  undeniable  clearness  the  wide- 
spread demand  for  acceptable  comforts  and  luxuries, 
thus  bespeaking  the  satisfaction  of  the  well-to-do. 

4.   THE  CHARITY  BALL, 

There  is  a  deal  of  vile  nonsense  spoken  on  this  par- 
ticular issue.  No  one  point  in  economics  has  been  so 
flagrantly  misstated  as  the  results  of  expenditures  for 
comforts  and  luxuries. 

After  diligent  inquiry  the  well-to-do  have  made  two 

1  "The  Political  Economy  of  Art,"  John  Ruskin,  Part  II,  Ap- 
plication. 


72         EEDUCING  THE  COST  OF  LIVING 

answers  (the  reply,  "  Cannot  a  man  do  as  he  will  with 
his  own?"  cannot  be  dignified  with  the  title  of  "an- 
swer"). The  first  of  these  answers  is, — "We  exert 
ourselves  in  philanthropic  ways  for  these  people." 
The  second  is, — "We  spend  our  money,  and  thus  cir- 
culate it  in  the  community."  Both  answers  are  legiti- 
mate subjects  of  analysis,  since  both  are  freely  bandied 
about  in  every  public  discussion  of  the  subject. 

Pursuant  of  the  philanthropic  principle,  good  peo- 
ple organize  various  schemes  for  the  uplift  of  their 
fellows.  lu  all  of  the  large  cities  charity  balls  are 
given.  Vast  sums  are  expended  in  decorations  and  in 
elaborate  toilets.  If,  perchance,  the  affair  clears  ex- 
penses, the  surplus  finds  its  way  into  the  coffers  of 
some  philanthropic  institution.  The  patrons  of  the 
charity  ball  believe  that  it  is  charity.  A  fair-minded 
outsider  cannot  help  seeing  that  the  real  beneficiaries 
of  the  charity  ball  are  the  people  who  attend,  even 
though  a  few  crumbs  fall  from  their  table  to  be 
snatched  at  by  the  needy. 

There  was  recently  given  in  a  large  city  a  bridge  for 
the  benefit  of  a  home  for  destitute  colored  orphans. 
To  this  affair  splendid  ladies  came,  decked  out  in 
jewels  and  fine  laces,  paid  the  admission  fee  of  a  dol- 
lar, gazed  covetously  at  the  rich  prizes  arranged  on  a 
table  in  the  center  of  the  room,  and  then  turned  with 
avidity  to  the  game.  After  two  hours  of  intense 
play  these  ladies  separated  and  returned  to  their  com- 
fortable homes,  taking  their  jewels  and  fine  laces  with 
them.  Each  had  played  for  a  great  stake.  Many  had 
lost ;  a  few  had  won.  They  had  done  it  all  in  the 
name  of  charity. 


THE  INCREASING  USE  OF  COMFORTS     73 

The  charity  ball  and  the  bridge  for  destitute  colored 
orphans  are  a  form  of  make-believe  charity  that  has 
deluded  the  world  for  ages.  The  patrons  go  because 
it  is  the  thing  to  do.  If  they  were  charitably  inclined 
they  would  exchange  their  splendid  attire  for  sack- 
cloth and  ashes,  and  give  the  cost  of  their  extravagant 
clothes  and  jewels  to  the  poor. 


5.    SPENDING  OR  PROSPERITY  t 

"We  spend  our  money  and  thus  circulate  it  in 
the  community."  Does  spending  make  prosperity! 
"  Yes,"  you  aver,  "  if  it  makes  work."  Put  aside  the 
"makes  work "  argument  for  the  time  being,  and  con- 
fine the  discussion  to  spending. 

What  is  spending?  What  but  an  act  whereby  a 
person,  having  an  income,  exchanges  that  income  for 
things  that  will  satisfy  his  wants. 

There  are  many  people  in  the  community  who  still 
believe  that  the  man  who  spends  benefits  his  fellow 
men.  Carry  that  philosophy  to  its  logical  conclusion 
and  let  one  person  in  the  community  take  all  of  the  in- 
come and  spend  it.  Would  his  fellows  be  benefited  ? 
It  is  true  that  no  doctrine  can  fairly  be  carried  to  its 
logical  conclusion.  Nevertheless,  it  is  a  false  doctrine 
which  will  not  permit  of  some  logical  analysis. 

At  the  present  time  one  class  in  the  community 
spends  for  another  class.  A  vast  bulk  of  income  goes 
into  the  pockets  of  the  well-to-do.  This  group  directs 
its  expenditures  in  a  way  to  suit  itself.  It  consumes 
wealth  for  comforts  and  luxuries,  then  consoles  itself 
with  the  belief  that  spending  benefits  the  community. 


"  But  we  circulate  our  money,"  argue  the  spenders. 
That  is  true  ;  the  spender  does  circulate  money.  Pros- 
perity consists,  however,  not  in  the  circulation  of 
money,  but  in  the  opportunity  which  each  enjoys  to 
spend  his  income  in  a  way  that  will  suit  his  wants. 
Eeal  prosperity  involves  spending  by  the  people  who 
want  the  necessaries  and  the  simpler  comforts  of  life. 
When  the  necessaries  and  comforts  are  supplied  to  all 
of  the  people,  it  will  be  time  to  consider  whether  the 
spending  of  surplus  wealth  by  the  well-to-do  adds  to 
social  prosperity.  Meanwhile,  it  is  evident  on  the 
face  of  things  that  when  the  well-to-do  buy  automobiles 
and  silk  clothing,  they  exchange  their  income  for 
comforts  which  they  are  to  enjoy.  The  men  and 
women  who  are  engaged  in  the  production  of  auto- 
mobiles and  silk  clothing  receive  no  higher  salaries 
than  the  men  and  women  engaged  in  the  production  of 
cotton  cloth  and  delivery  wagons.  The  mobility  of 
labor  is  a  guarantee  against  any  material  difference  in 
wages  between  those  who  produce  necessaries  and 
those  who  produce  luxuries. 

A  great  part  of  the  income  of  the  community  is 
spent  for  comforts  and  luxuries  by  the  well-to-do. 
That  expenditure  means  an  increase  in  the  production 
of  luxuries  and  comforts.  Were  that  same  income 
spent  for  necessaries  and  the  smaller  comforts  by  the 
poorer  people  in  the  community,  there  would  be  an 
equally  increased  demand  for  necessaries  and  comforts. 
Spending  involves  prosperity  only  when  the  spending 
is  done  by  people  who  are  thereby  obtaining  the  nec- 
essaries of  life.  Spending  by  the  rich  makes  no  in- 
crease in  the  individual  incomes  of  the  poor. 


THE  INCREASING  USE  OF  COMFORTS     75 

6.  MAKING  WOBK  is  MAKING  WANT 
The  "making  work"  argument  is  frequently  used, 
and  as  often  abused.  "When  we  spend,"  insist  the 
luxury  seekers,  "we  make  work."  In  one  specious 
sense  that  is  true.  Industry  is  carried  on  in  response 
to  demand.  As  people  go  in  the  market  and  offer 
to  buy  goods  production  is  stimulated  and  new  goods 
are  produced.  There  is  no  real  sense,  however,  in 
which  the  position  is  sound. 

Suppose  that  instead  of  spending  your  money  and 
"making  work,"  you  left  it  with  the  bank.  Loaned 
out  to  some  industrial  enterpriser,  it  would  then  be 
used  to  build  a  factory,  or  extend  a  trolley  line.  Thus 
it  would  not  only  make  work,  but  it  would  add  to  the 
wealth  of  the  community  as  well. 

The  real  fallacy  in  the  "making  work  "  idea  lies  in 
the  belief  that  the  using  up  of  wealth  is  a  good  thing. 
Granted  that  he  who  makes  work  is  a  public  benefactor, 
it  necessarily  follows  that  he  who  makes  the  most  work 
is  the  greatest  benefactor.  Thus  he  who  gives  a  dinner 
provides  work  for  the  butcher,  the  grocer,  the  gardener, 
and  the  butler.  To  this  extent,  he  benefits  society, 
while  he  and  his  friends  gorge  themselves  with  the 
dinner.  They  were  not  hungry  when  they  sat  down 
to  eat,  and  the  meal  impaired  instead  of  improving 
their  health.  Nevertheless,  they  made  work  for  those 
who  prepared  the  meal.  The  next  day,  instead  of 
giving  a  dinner,  mine  host  decides  to  tear  down  his 
house  and  build  a  larger  one.  By  so  doing  he  makes 
work  for  carpenters,  masons,  decorators,  and  all  of 
those  other  people  who  are  engaged  in  building.  His 
limit  as  a  benefactor  is  not  yet  reached,  however.  He 


76         REDUCING  THE  COST  OF  LIVING 

lives  in  a  city  which  he  one  day  surveys  from  the  top 
of  a  high  tower.  "What  an  opportunity,"  he  tells 
himself.  "  I  will  burn  down  this  city  in  order  that  I 
may  make  work  for  its  people."  He  descends  from 
the  tower  and  burns  down  the  city.  The  next  day 
there  is  work  for  all  and  to  spare.  Has  this  man  who 
ate  a  dinner  which  he  did  not  need,  and  built  a  house 
which  he  did  not  require,  and  burned  a  city  that  he 
might  make  work  for  its  inhabitants,  really  benefited 
his  fellows'?  Certainly  he  has  not.  He  is  a  real 
benefactor  who  adds  to  the  wealth  of  the  community. 
The  wanton  destruction  of  wealth,  or  the  destruction 
of  wealth  which  is  involved  in  satisfying  the  wants  of 
whims  or  fancies  for  those  who  are  already  satisfied 
with  the  things  of  life,  is  no  public  benefaction.  Des- 
troying wealth  uselessly  makes  want,  not  prosperity. 

There  is  a  saying  of  momentous  importance  to  the 
world, — "Do  not  grind  the  seed  corn."  If  the  seed 
corn  is  ground  there  will  be  no  sowing;  without  a 
sowing  there  can  be  no  harvest ;  and  if  there  is  no 
harvest  the  people  will  die  of  famine. 

There  is  a  saying  of  like  importance  to  society, — 
"  Do  not  deny  the  necessaries  of  life  to  the  workers." 
If  the  necessaries  are  denied  to  the  workers,  then 
efficiency  will  be  impaired  ;  if  efficiency  is  impaired, 
the  production  of  things  is  curtailed  ;  the  curtailing  of 
production  makes  less  possible  the  provision  of  neces- 
saries, and  the  vicious  circle  is  perpetuated  to  the  end 
of  the  chapter.  There  is  no  more  essential  principle 
in  modern  statesmanship  than  this  of  the  vital  impor- 
tance of  providing  the  necessaries  of  life  to  those  who 
do  the  work  of  the  world. 


THE  INCEEASING  USE  OF  COMFOETS     77 

From  the  standpoint  of  the  economist,  or  of  the 
statesman,  it  matters  not  a  whit  whether  any  one  has 
luxuries.  All  of  the  luxuries  in  civilization  might  be 
destroyed  over  night,  and  the  machinery  of  life  would 
continue  as  before.  Deny  the  necessaries,  however, 
and  the  world  stops. 

7.    THE  SOCIAL  BURDEN  OF  INCREASING 
LUXURY 

Whatever  the  final  readjustments  which  ethical  and 
economic  considerations  force  upon  mankind,  this  fact 
remains, — that  increasing  luxury  constitutes  an  in- 
creasing social  burden. 

The  people  who  enjoy  luxury  do  not  necessarily 
render  a  return  to  society  in  proportion  to  the  income 
which  is  at  their  disposal.  It  is  true  that  some  men 
and  women  of  large  income  have  been  largely  service- 
ful.  It  is  likewise  true  that  with  each  passing  year 
there  are  afloat  in  the  community  a  larger  body  of 
mortgages,  stocks,  and  bonds,  and  title  deeds,  by 
virtue  of  which  the  owner,  in  return  for  his  ownership, 
may  receive  an  income. 

The  holders  of  property  are  not  necessarily  idle. 
Among  them  are  the  leaders  in  the  world's  activities. 
The  mere  holding  of  property,  however,  to-day  gives  to 
the  holder  a  right  to  live,  if  he  so  chooses,  without 
rendering  any  return  service  at  the  expense  of  society. 
Other  men  labor.  The  property-holder  gathers  in  the 
fruits  of  their  labor. 

The  rapid  increase  in  property  makes  it  more  and 
more  possible  for  a  certain  number  of  persons  to  live  on 
their  property.  They  travel,  spend,  live  splendidly. 


78         EEDUCING  THE  COST  OF  LIVING 

Their    property    titles    buy  them  the  comforts  and 
luxuries  which  they  enjoy. 

Nothing  can  be  consumed  which  has  not  been  pro- 
duced. If  these  live  without  assisting  society  in 
production,  it  necessarily  follows  that  some  others 
must  be  producing  the  wherewithal  by  means  of 
which  these  live.  For  the  luxury  of  a  great  part  of  the 
community,  the  remainder  of  the  community  is  de- 
prived of  wealth  which  those  who  live  in  luxury  enjoy. 
Thus,  to  a  larger  and  larger  degree,  society  pays  the 
bill  for  the  luxuries  of  a  few  of  its  members.  The  bill 
grows  constantly  larger  with  each  passing  year.  That 
increasing  bill  is  an  item  in  the  increasing  cost  of 
living. 


VI 

THE  ASCENDING  SCALE  OF  NECESSABIES 
OP  LIFE 

1.    WHAT  ARE  NECESSARIES  ? 

THE  definition  of  necessaries  as  those  goods  and 
services  which  are  requisite  for  maintaining  physical 
efficiency  is  arbitrary.  There  is,  however,  no  definition 
which  will  meet  with  universal  approval,  and  this  one 
seems  as  well  qualified  as  any  for  general  acceptance. 

The  idea  of  efficiency,  of  living  with  high  vitality 
and  a  full  head  of  energy,  carries  with  it  good  work 
and  effective  leisure.  It  gives  to  the  income-earner  a 
stock  of  energy  sufficient  to  replace  the  goods  and 
services  which  were  consumed  in  creating  that  energy. 
Furthermore,  it  sets  a  standard  upon  which  normal 
health  and  normal  length  of  life  should  be  attained. 

2.  THE  EXPENDITURE  FOR  NECESSARIES 
Public  opinion,  in  particular  that  portion  of  public 
opinion  which  retains  a  vivid  recollection  of  its  Puritan 
ancestors,  holds  that  this  is  an  age  of  fearful  extrava- 
gance. There  is  some  ground  for  such  a  view.  Wher- 
ever the  eye  turns  it  encounters  signs  of  extravagant 
living, — expensive  tours,  gay  clothes,  gorgeous  enter- 
tainments, and  needlessly  ornate  houses.  The  well-to- 
do  and  the  rich  have  set  a  pace  of  costly  living  that 
brings  the  ordinary  citizen  to  his  feet  with  a  gasp. 
The  age  seems  extravagant,  yet,  if  the  truth  could 


80         EEDUCING  THE  COST  OP  LIVING 

be  known,  it  would  probably  appear  that  the  vast  pro- 
portion of  income  spent  by  the  American  people  is 
spent  for  necessaries,  rather  than  for  comforts  or 
luxuries.  Unfortunately  there  is  no  way  in  which  the 
situation  can  be  accurately  measured.  It  is,  however, 
worth  while  to  note  the  immense  preponderance  of 
those  industries  which  are  apparently  producing  the 
necessaries  of  life. 

There  are  two  classes  of  industries  that  fall  under 
the  census  data  on  manufactures.  One  deals  with  the 
production  of  capital  goods,  machines,  tools,  raw 
materials,  and  the  like.  The  other  deals  with  the  pro- 
duction of  consumption  goods.  It  is  in  this  latter  class 
that  the  present  interest  centers. 

One  cannot  say  that  an  industry  is  devoted  exclusively 
to  the  production  of  comforts  and  luxuries,  or  to  the  pro- 
duction of  necessaries.  Nevertheless,  certain  industries, 
such,  for  example,  as  the  manufacture  of  cigar  boxes, 
may  well  be  classed  as  industries  concerned  almost 
wholly  with  the  production  of  luxuries  ;  while  certain 
other  industries,  such,  for  example,  as  the  production 
of  butter,  cheese,  and  condensed  milk,  may  be  regarded 
as  creating  the  necessaries  of  life.  For  the  great 
majority  of  industries  the  distinction  is  not  absolute. 
Cotton  goods  may  sell  for  ten  cents,  or  fifty  cents,  a  yard. 
Flour  may  be  converted  into  French  pastry  or  bread. 
Furniture  may  be  for  the  kitchen  or  the  exclusive  draw- 
ing-room. In  spite  of  the  obvious  inadequacy  of  the 
classification,  there  are  certain  industries  which  may 
be  generally  regarded  as  producing  luxuries,  and 
certain  other  industries  may  be  looked  upon  as  pro- 
ducing necessaries. 


NECESSARIES  OF  LIFE  81 

A  moiig  the  industries  producing  luxuries  1 

8  report  the  employment  of  over    25,000  persons 
5       "       "  "  "     "       50,000       " 

2       "       "  "     "    100,000      " 

The  two  industries  which  report  the  largest  number  of 
employees  are  the  tobacco  manufacturing,  with  197,637 
persons  at  work,  and  the  manufacture  of  silk  and  silk 
goods,  with  105,238  persons  at  work. 
The  value  added  by  manufacture  was 

More  than    $  25,000,000    in    8  industries 
"       "  50,000,000     "     5          " 

100,000,000     "     3 

The  three  industries  with  more  than  a  hundred  million 
of  capital  were  the  manufacture  of  liquors,  of  tobacco, 
and  of  automobiles.  The  eight  industries  which  may 
be  described  as  large  luxury-producing  industries  are 
automobiles,  clock  and  watch,  confectionery,  jewelry, 
liquor,  piano  and  organ,  silk  and  silk  goods,  and 
tobacco.  It  will  be  noted  that  several  of  these  indus- 
tries, for  instance,  automobile,  clock  and  watch,  and 
silk  and  silk  goods,  are  engaged  in  producing  many 
goods  that  are  necessaries. 

The  contrast  between  the  number  of  large  industries 
producing  luxuries  and  the  number  producing  neces- 
sities is  sharp  indeed.  Among  the  industries  produc- 
ciug  necessities 

19  report  the  employment  of  over    25,000  persons 
11       "       "  "          "     "      50,000       " 

10       "       "  "     "     100,000       " 

1  All  of  these  figures  are  taken  from  the  Census  of  Manufactures, 
1909.  See  Appendix  A. 


82         EEDUCING  THE  COST  OF  LIVING 

AmoDg  these  industries  the  value  added  by  manufac- 
ture was 

More    than    $  25,000,000  in  24  industries 
"        "  50,000,000    "    11          " 

100,000,000    "      8          " 

The  ten  industries  reporting  the  employment  of 
more  than  100,000  persons  were  boot  and  shoe,  bread 
and  bakery,  men's  clothing,  women's  clothing,  cotton 
goods,  furniture  and  refrigerators,  hosiery  and  knit 
goods,  slaughtering  and  meat  packing,  woolen  and 
worsted  goods.  It  must  be  apparent  without  further 
discussion  that  the  number  of  important  industries  in 
which  necessaries  are  produced  is  greatly  in  excess  of 
the  number  which  produce  comforts  and  luxuries. 
Industry  is  devoted  very  largely  to  the  production  of 
necessaries.  Comforts  and  luxuries  form  but  a  small 
element  in  the  total  of  the  country's  purchases. 

3.  THE  PRESSURE  OF  CIVILIZATION 
The  pressure  of  civilization  is  constantly  creating 
new  standards  of  necessaries  and  comforts.  First  new 
wants  are  stimulated  in  men  ;  then  the  means  are  dis- 
covered for  meeting  these  wants  ;  and  finally  the  wants 
are  looked  upon  as  wants  for  necessaries  of  life.  The  use 
of  books  and  papers  furnishes  an  excellent  case  in  point. 
It  is  but  a  few  centuries  since  books  were  written  on 
vellum.  Then  the  process  of  printing  from  movable 
types  was  discovered.  Up  to  that  time  books  had  been  a 
luxury,  purchasable  only  by  the  very  rich.  From  that 
time  forward,  book  manufacturing  has  been  cheapened 
through  the  introduction  of  cheap  papers  and  efficient 
methods  of  printing,  until  books,  papers,  and  mag- 


NECESS ABIES  OF  LIFE  83 

aziues  are  sold  at  so  low  a  figure  they  are  looked 
upon  as  one  of  the  necessaries  of  life  and  intellectual 
growth. 

The  processes  of  civilization  have  added  books  to 
the  list  of  necessaries.  Culture  and  education  have 
forced  upon  men  a  new  want.  The  younger  genera- 
tion coming  into  the  world  is  compelled,  even  against 
its  will,  to  spend  a  large  portion  of  its  time  perusing 
books  which  were  undreamed  of  luxuries  among  its 
ancestors. 

4.  EDUCATION  AND  NECESSABIES 
The  most  potent  single  force  in  changing  the  stand- 
ard of  necessaries  is  education.  By  means  of  educa- 
tion ideas  and  ideals  of  livelihood  are  advanced.  More 
than  that,  however,  education  breeds  democracy  ;  and 
on  that  foundation  the  increasing  standard  of  neces- 
saries have  been  built. 

Where  a  caste  system  prevails,  where  men  recog- 
nize that  equality  is  impossible,  the  standards  of  the 
different  castes  remain  utterly  different.  The  priest 
caste,  or  the  governing  caste,  enjoys  the  first  fruits  of 
the  earth.  The  lowest  caste  of  agricultural  laborers 
receives  the  barest  pittance  that  will  induce  the  soul 
to  remain  in  the  body.  The  lower  caste  may  hate  the 
higher,  but  it  does  not  seek  to  emulate  its  standard. 

Into  the  arena  of  caste- content,  democracy  throws 
the  gage  of  revolt.  Men  are  potentially  equal, 
preaches  the  democratic  spirit.  No  man  has  an  inher- 
ent right  to  have  more  possessions  than  any  other 
man.  This  one  wears  the  ermine ;  his  father  was  a 
wood-cutter.  Yonder  lady  is  decked  with  jewels ;  her 


84         BEDUCING  THE  COST  OF  LIVING 

mother  was  a  charwoman.     Not  what  our  fathers  had, 
but  what  we  possess,  be  our  glory  under  a  democracy  ! 

Wherever  the  democratic  spirit  is  injected  into  a 
society  of  unequal  income,  discontent  ensues.  Am- 
bition is  stimulated.  Men  are  taught  to  strive  for  a 
place  at  the  top. 

Granted  the  presence  of  unequal  income — there  is 
no  society  where  incomes  are  equal — it  follows  that  the 
more  unequal  the  income,  with  a  given  democratic 
attitude,  the  more  keen  will  be  the  competition  for  a 
place  at  the  top.  Similarly,  with  a  given  inequality 
of  income,  an  increasing  belief  in  equal  rights  will 
cause  an  increase  in  competition. 

The  incentive  to  competition  for  place  in  the  United 
States  has  been  education.  Boys  and  girls  have  been 
stimulated  to  a  belief  in  themselves  and  in  their 
powers  of  success.  They  have  been  taught  to  look  up 
and  ahead.  There  was  a  place  at  the  top,  if  they 
could  but  get  there,  and  the  top  meant  a  large  income 
to  spend  for  many  things. 

The  teachings  of  the  public  schools  have  caused  a 
phenomenal  rise  in  the  standard  of  those  things  which 
are  considered  necessary.  If  the  banker  can  have  a 
suit  cut  to  this  year's  style,  why  may  not  his  book 
keeper,  or  the  janitor  of  his  bank,  or  the  street-cur 
conductor  who  rattles  his  change  past  the  door? 
There  is  but  one  reply — "He  should.''  Proceeding 
on  that  assumption,  the  men  all  buy  suits  that  are  in 
style.  So,  too,  women  in  every  social  group  consider 
it  necessary  on  some  occasions  to  wear  white  gloves. 
If  it  is  necessary  for  my  lady,  why  not  for  the  girl 
who  sells  her  novelties  over  a  counter  ?  Again  there 


NECESSAKIES  OF  LIFE  85 

is  but  one  reply,  aud  the  white  glove  is  universally 
worn.  To  be  sure  all  classes  do  not  wear  the  same 
grade  of  gloves.  The  effort  to  emulate  is  present, 
however. 

The  rise  in  the  standard  of  those  things  which  are 
considered  necessaries  is  a  part  of  the  rise  in  the 
standard  of  civilization.  Just  as  freedom  and  knowl- 
edge were  at  one  time  spread  from  the  few  to  the 
many,  so  now  the  advances  of  civilization  are  made 
into  a  common  heritage. 

5.  THE  STORY  OF  A  PAST  GENERATION 
Twentieth  century  Americans  find  it  hard  to  real- 
ize how  complete  the  change  in  ' '  necessaries  "  has  been 
during  a  few  brief  years.  The  family's  diet  has  been 
augmented ;  the  supply  of  clothing  has  been  varied 
and  increased  ;  houses  have  been  improved  ;  and  the 
number  of  things  which  a  dollar  will  buy  has  risen 
almost  beyond  computation. 

Only  a  few  years  have  elapsed  since  Joseph  Barton 
Felt  wrote  "The  Annals  of  Salem,"  in  which  are 
described  the  living  conditions  of  a  typical  New  Eng- 
land town  of  the  eighteenth  century.  He  says  of  the 
houses, — "While  oiled  paper  lighted  the  cottages, 
glass  did  the  same  for  more  convenient  abodes." 
"  Though  in  the  first  occupation  of  our  soil,  a  few 
of  the  more  distinguished  brought  a  stinted  store  of 
carpets  with  them,  these  articles  were  not  seen  in  the 
far  greater  portion  of  our  better  houses.  Down  to 
even  1800,  but  a  small  part  of  our  common  livers  had 
their  parlors  ornamented  with  them.  Every  Monday, 
after  washing,  the  floors  would  be  scoured  as  white  as 


86         BEDUCING  THE  COST  OF  LIVING 

piue  would  allow  them,  in  all  regular  establishments, 
and  then  the  light  blue  sand,  from  the  beaches  of 
Gloucester  and  Ipswich,  would  be  thrown  on,  in  hand- 
fuls,  so  as  to  make  circular  and  spotted  figures." 

The  life  of  the  New  England  farmer  was  simplic- 
ity itself.  McMaster  thus  describes  his  situation  in 
1784: — "The  Massachusetts  farmer  who  witnessed 
the  revolution  ploughed  his  land  with  the  wooden 
bull-plough,  sowed  his  grain  broadcast,  and,  when  it 
was  ripe,  cut  it  with  a  scythe,  and  thrashed  it  on  his 
barn  floor  with  a  flail.  His  house  was  without  paint ; 
his  floors  were  without  carpet.  When  darkness  came 
on  his  light  was  derived  from  a  few  candles  of  home 
manufacture.  The  place  of  furnaces  and  stoves  was 
supplied  by  huge  cavernous  fireplaces  which  took  up 
one  side  of  the  room,  and,  sending  half  the  smoke  into 
the  apartment,  sent  half  the  heat  up  the  chimney. 
His  food  was  of  the  simplest  kind,  was  served  in  the 
coarsest  of  dishes,  and  eaten  with  the  coarsest  of  im- 
plements. Beef  and  pork,  salt  fish,  dried  apples  and 
vegetables,  made  up  the  daily  fare  from  one  year' send 
to  another."1 

The  wardrobe  of  the  farmer  was  as  simple  as  his 
living.  Store  clothes  he  never  knew ;  the  things 
which  he  used  were  of  home  make,  or  so  near  home 
make  as  to  be  homely  in  the  extreme. 

The  living  of  the  town  laborer  in  the  eighteenth 
century  was  wretched.  "  A  man  who  performed  what 
would  now  be  called  unskilled  labor,  who  sawed  wood, 
who  dug  ditches,  who  mended  the  roads,  who  mixed 

1(1  A  History  of  the  People  of  the  United  States,"  John  Baoh 
MoMaster,  D.  Appleton  and  Co.,  New  York,  Vol.  I,  p.  18. 


NECESSAKIES  OF  LIFE  87 

mortar,  who  carried  boards  to  the  carpenter  and  bricks 
to  the  mason,  or  helped  to  cut  hay  in  the  harvest  time, 
usually  received  as  the  fruit  of  his  daily  toil  two 
shillings. 

"On  such  a  pittance  it  was  only  by  the  strictest 
economy  that  a  mechanic  kept  his  children  from  star- 
vation and  himself  from  jail.  .  .  .  A  pair  of  yel- 
low buckskin  or  leathern  breeches,  a  checked  shirt,  a 
red  flannel  jacket,  a  rusty  felt  hat  cocked  up  at  the 
corners,  shoes  of  neat's  skin  set  off  with  huge  buckles 
of  brass,  and  a  leathern  apron,  comprised  his  scanty 
wardrobe.  The  leather  he  smeared  with  grease  to 
keep  it  soft  and  flexible.  His  sons  followed  in  his 
footsteps,  or  were  apprenticed  to  neighboring  trades- 
men." l  The  twentieth  century  workingman  would 
think  of  himself  as  living  in  the  depths  of  misery 
were  any  such  standards  imposed  upon  him  as  those 
accepted  by  men  of  his  class  at  the  end  of  the  eight- 
eenth century. 

6.  STATE  AID  FOR  THE  MULTITUDE 
The  increase  in  the  number  of  things  which  are 
looked  upon  as  necessaries  has  been  phenomenal. 
Even  more  rapid  has  been  the  growth  in  the  number 
of  services  which  the  state  is  expected  to  render  to 
its  citizens. 

The  change  of  the  state  from  a  predatory,  profit- 
seeking  enterprise  into  an  institution,  the  objective 
point  of  which  is  service,  has  loaded  upon  the  shoul- 
ders of  the  state  new  burdens.  The  new  state  is  the 

1  "A  History  of  the  People  of  the  United  States,"  John  Bach 
McMaster,  D.  Appletou  and  Co.,  New  York,  Vol  I,  pp.  96-97. 


88         BEDUCING  THE  COST  OF  LIVING 

servant  of  the  citizens.  Are  there  social  wrongs  such 
as  child  labor  and  overwork  1  The  state  is  the  agency 
depended  upon  to  redress  them.  Is  there  a  need  for 
great  social  enterprises,  such  as  the  building  of  a 
Panama  Canal,  the  reforestation  of  a  state,  the  pre- 
vention of  floods,  or  the  inauguration  of  a  program  of 
laud  reclamation  ?  The  state  is  the  agency  depended 
upon  to  perform  the  service.  The  state  is  a  servant 
which  is  each  year  assuming  new  responsibilities  and 
duties  for  those  who  comprise  it.  The  forms  of  state 
activity  vary.  The  city  protects  against  ill-health, 
fire,  and  disturbance.  There  are  lighted  and  paved 
streets,  parks,  playgrounds,  and  public  buildings. 
The  city  is  a  public  enterprise,  run  for  public  service. 
The  state  governments  and  the  national  governments 
likewise  render  services. 

Governments  are  expensive.  During  recent  years 
there  has  been  a  rapid  increase  in  public  expenditures. 
In  1878,  the  expenditures  of  the  United  States  Govern- 
ment amounted  to  $4.98  per  capita,  or  $24.90  per 
family.  During  the  next  thirty  years  they  rose  to 
$7.45  per  capita  or  $37.25  per  family.1  For  the  state 
of  Massachusetts  an  even  greater  increase  has  occurred. 

The  rapidity  with  which  the  amount  of  governmental 
expenditure  has  increased  is  due  to  the  changes  in  the 
objects  for  which  the  government  spends  money.  The 
various  governmental  departments — the  Legislative 
Department,  the  Judiciary,  and  the  like,  show  a  com- 
paratively small  increase  in  appropriations  during  the 
past  thirty  years.  Expenses  for  education,  for  chari- 

1  Report  of  the  Massachusetts  Commission  on  the  Cost  of  Living, 
House  Document  No.  1750,  Boston,  1910,  p.  208. 


NECESSARIES  OF  LIFE  89 

ties,  for  commissions  and  boards  and  the  like  items 
have  risen  with  remarkable  rapidity.  The  original 
functions  of  government  cost  little  more  now  than  they 
did  a  generation  ago  ;  the  cost  of  the  social  functions 
is  vastly  increased. 

The  cost  of  government  has  become  a  considerable 
item  in  the  budget  of  the  family.  Averages  are 
always  unsatisfactory,  yet  there  seems  no  other  way 
in  which  governmental  costs  can  be  expressed.  The 
Massachusetts  Commission  makes  the  following  calcu- 
lation of  the  costs  of  government  to  city  dwellers  in 
Massachusetts :  l 

Per  Capita  Per  Family 

For  national  government,  1908  ...    $  9.722  $  48.610 

For  state  government,  1909         .    .   .        3.912  19.560 

For  municipal  government,  1906             24.750  123.750 

138.384        $191.920 

This  average  would  not  hold  for  any  given  family. 
Nevertheless,  it  indicates  the  real  extent  of  govern- 
mental costs. 2 

1  Report  of  the  Massachusetts  Commission  on  the  Cost  of  Living, 
House  Document  No.  1750,  Boston,  1910,  p.  210. 

a  The  Massachusetts  report  contains  the  following  explanation  of 
the  above  figures  (pp.  210-211)  : 

"  It  will  be  seen  that  including  all  county  expenses  and  taking 
into  account  late  increases,  the  actual  cost  of  government  to  the 
average  dweller  in  a  Massachusetts  city  is  not  far  from  $40,  or  $200 
for  the  average  family  (by  the  census  of  1905  it  was  found  that  the 
average  size  of  the  normal  families  of  the  state  was  4.44,  but  for 
convenience  in  computations  is  the  usual  number  taken)  supposed 
to  consist  of  five  persons. 

"  County  expenses  outside  of  Suffolk  County  average  about  $1  per 
capita. 


90         BEDUCING  THE  COST  OF  LIVING 

The  cost  of  living  has  risen  for  this  reason  among 
others.  The  people  are  expecting  more  service  from 
the  state  with  each  passing  decade.  There  are  more 
services,  and  the  services  are  more  elaborate.  This 
service,  provided  so  lavishly  on  every  hand,  adds 
greatly  to  the  final  cost  of  living. 

7.    THE  ASCENDING  SCALE 

There  is  an  ascending  scale  of  those  things  which 
are  commonly  looked  upon  as  comprising  the  neces- 
saries of  life.  Invention  and  discovery  make  possible 
more  things.  The  existence  of  more  things  stimulates 
wants.  Education  leads  men  to  believe  that  one  is  as 
worthy  as  another  to  enjoy  the  good  things  of  life. 
From  top  to  bottom  of  the  social  scale,  the  standard  of 
necessaries  has  rapidly  increased. 

Nevertheless,  it  remains  true  that  the  well-to-do 
have  pushed  their  standard  ahead  more  rapidly  than 
those  farther  down  in  the  income  scale  have  been  able 

"  Town  government  in  Massachusetts  average  to  cost  less  than 
half  as  much  as  city  government,  so  that  to-day  the  total  share  of 
the  town  dweller  in  all  costs,  local,  county,  state,  and  national,  is 
something  under  $30  per  capita, — probably  about  $140  for  the 
average  family. 

"The  total  revenues  of  the  United  Kingdom  in  1908,  national 
and  local,  averaged  $32.09  per  capita,  or  $160.45  for  the  family  of 
five.  President  A.  Lawrence  Lowell,  in  '  The  Government  of  Eng- 
land,' 1909, said  : 

"  '  It  would  seem  that  the  burden  of  local  taxation  in  Boston  is 
not  very  different  from  that  of  the  average  county  borough  (in 
England),  and  it  is  probably  less  than  in  the  larger  English  cities, 
where  the  rate  is  usually  higher  than  in  the  smaller  towns.' 

"In  France,  the  average  of  the  total  revenues,  national  and 
local,  is  about  $23.27." 


NECESSARIES  OF  LIFE  91 

to  follow.  There  is  no  way  in  which  such  changes  can 
be  measured,  but  it  seems  clear  that  the  contrast  be- 
tween the  day  laborers'  life  and  the  life  of  the  well-to- 
do  members  of  the  community  was  never  so  great  as  it 
is  to-day.  It  is  not  true  that  the  poor  are  getting 
poorer.  There  has  probably  never  been  a  time  since 
the  industrial  revolution  when  the  day  worker  re- 
ceived more  things  in  exchange  for  his  day's  work. 
During  the  last  hundred  years  the  poor  have  grown 
richer — a  very  little  richer,  while  the  rich  have  grown 
richer  at  an  unheard-of  rate. 

The  standard  of  necessaries  continues  to  advance. 
The  stove  has  replaced  the  hearth  ;  the  granite  kettle 
the  iron  pot ;  sugar  has  become  a  common  thing  in 
every  house;  well-made  shoes  are  generally  worn  ; 
glasses  and  tooth-brushes  are  insisted  on  in  the  schools. 
The  well-to-do  accept  as  a  matter  of  course  this  increase 
in  necessaries.  The  low-income  family  stands  before 
it  appalled.  How  shall  its  stationary  income  meet 
this  increasing  demand  in  the  face  of  increasing  prices  ! 
It  is  there  where  the  rising  standard  of  necessaries 
meets  the  rising  price  of  necessaries, — there  in  the 
home  of  the  low-income  family  that  the  high  cost  of 
living  strikes  hardest  at  that  great  bulwark  of  society 
called  the  common  people. 


VII 
GETTING  AHEAD 

1.    THE  NEIGHBORS 

WHEN  the  discussion  of  rising  standards  has  been 
ended  ;  when  it  is  clear  that  families  of  all  classes  and 
particularly  the  families  of  the  well-to-do  are  wanting 
more  things  and  more  services,  and  are  enjoying  more 
things  and  more  services  than  ever  they  did  before  ; 
when  luxuries  have  been  so  plainly  differentiated  from 
necessaries  that  he  who  runs  may  read  the  writing, — 
after  all  it  remains  true  that  the  people  who  count  for 
most  are  the  neighbors. 

People  have  wants  ;  they  enjoy  comforts  and  lux- 
uries. It  is  the  neighbors  who  suggest  the  wants  and 
the  neighbors  who  possess  the  comforts  and  the  lux- 
uries. If  the  neighbors  possess  them,  there  is  no 
escape.  One  telephone  in  a  new  neighborhood  of  ten 
houses  is  the  first  step  in  ten  installations.  "It  is  so 
convenient,  you  know,  and  then,  besides,  every  one  is 
getting  in  a  'phone."  The  argument  is  unanswerable 
and  the  telephone  company  receives  its  order.  We 
live  for  the  neighbors  as  the  neighbors  live  for  us. 
We  emulate  their  standards  as  they  emulate  ours. 
We  court  their  approval  and  dread  their  censure,  as 
they  do  ours.  We  are  competitors,  living  so  close  to 
one  another  that  each  is  able  to  keep  a  constant  check 
upon  the  stock  which  the  other  is  putting  in. 


GETTING  AHEAD  93 

There  is  no  competition  like  the  competition  of 
neighbors.  Economists  write  of  the  cut- throat  compe- 
tition of  commercial  life.  It  is  generous  rivalry  com- 
pared with  the  havoc  which  one  neighbor  may  make 
in  a  friendly  group.  The  competition  of  industry  is 
intermittent.  There  are  price  wars  and  truces.  The 
competition  of  neighbors  is  continuous  and  ferocious. 
Men  and  women  look  constantly  to  the  neighbors, — 
buy  as  they  buy,  wear  as  they  wear,  enjoy  as  they 
enjoy  and  exist  as  they  exist.  Taken  in  all  of  its 
aspects  there  is  no  form  of  competition  so  insidious, 
so  omnipresent,  so  unrelenting  as  that  of  neighbors. 

2.  SOME  FOEMS  OF  SOCIAL  EMULATION 
The  competition  among  neighbors  may  take  one  of 
many  forms.  They  may  compete,  for  example,  in  the 
education  of  their -children.  They  may  compare  the 
child  intelligence,  child  imagination  and  other  of  the 
special  qualities  which  they  believe  their  children  to 
possess  in  a  high  degree.  They  may  compete  in  their 
efforts  to  render  service  to  the  community,  each  fam- 
ily striving  to  beautify  the  surroundings  of  its  house, 
and  to  be  otherwise  progressive  in  working  for  the 
interests  of  the  neighborhood.  All  neighbors  do  not 
have  children ;  all  do  not  have  improvable  front 
yards  but  there  is  one  thing  which  the  neighbors  uni- 
versally possess, — economic  goods.  Goods  therefore 
serve  as  a  common  denominator  of  social  emulation. 
Whether  in  the  form  of  necessaries,  or  of  comforts  and 
luxuries,  goods  are  the  social  yardstick. 

The  frequency  with  which  the  goods  test  is  applied 
in  family  competition  passes  unnoticed  with  the  indi- 


94         REDUCING  THE  COST  OF  LIVING 

viduals  who  apply  it.  How  common  a  thing  it  is  to 
judge  a  family's  standing  in  the  community  in  terms  of 
the  parlor  furniture,  the  clothes  which  the  mother 
wears,  the  character  of  the  curtains  on  the  windows 
and  other  like  objective  tests.  How  often  are  men 
and  women  alike  approved  or  condemned  by  the  style 
or  fit  of  their  clothes  ! 

The  well-worn  answer  to  the  accusation  that 
families  judge  one  another  on  a  goods  standard  is 
really  no  answer.  "  Yes,"  admit  the  neighbors,  "  we 
judge  them  by  what  they  put  in  their  windows,  and 
by  what  they  put  on  their  backs.  Of  course  we  do. 
That  is  a  perfectly  fair  standard  of  judgment.  If  a 
woman  is  a  good  housekeeper,  neat  and  tidy,  that  will 
show  on  her  windows.  If  a  man  is  a  self-respecting 
citizen,  his  self-respect  will  show  in  the  cut  of  his 
clothes."  In  that  answer  there  is  this  much  truth. 
Society  has  preserved  a  goods  standard  of  life  until  it 
looks  at  all  life  through  the  medium  of  goods.  The 
standard  is  purely  artificial.  Among  certain  savages, 
the  character  of  the  tattooing  on  the  skin  determines 
a  .man's  claim  to  a  place  in  society.  In  such  tribes 
the  respectable  citizens  are  the  well  tattooed  citizens. 
Clothes  and  house  furnishings  are  the  tattoo  of  civili- 
zation. They  are  not  the  man  ;  they  do  not  even  rep- 
resent the  man.  They  merely  represent  three  things, 
—his  income,  his  taste,  and  his  bump  of  order.  Yet 
income,  taste  and  bumps  of  order  do  not  make  up  the 
sum  total  of  life  ;  they  are  merely  the  border  of  one  of 
its  garments. 

Those  who  judge  their  neighbors  by  the  goods 
standard  have  another  argument — a  social  one. 


GETTING  AHEAD  95 

"You  should  conform  to  this  standard,"  they  insist, 
"  because  such  conformity  is  fair  to  the  neighbors. 
They  have  set  certain  standards.  When  they  appear 
in  public  they  wear  hats  and  shoes,  and  dress  in  style. 
If  you  have  any  regard  for  their  feelings,  you  will  do 
likewise  while  you  are  in  that  neighborhood." 

Such  an  argument  is  ingenuous  but  inconclusive. 
Go  back  one  step,  and  ask  why  it  is  that  the  neighbors 
wear  hats,  shoes,  and  stylish  clothes.  Is  it  because 
they  enjoy  them,  or  are  comfortable  in  them,  or  be- 
lieve in  themt  Certainly  not.  They,  too,  do  it  for 
the  neighbors. 

The  passage  of  time  has  witnessed  the  erection  of  a 
goods  standard  of  competition  among  the  neighbors. 
No  one  neighbor  is  responsible  for  the  existence  of  the 
standard.  All  must  follow  it.  Once  in  the  vicious 
circle,  the  family  is  doomed.  The  neighbors  do  this. 
It  is  respectable.  We  owe  it  to  ourselves  and  our 
neighbors  to  be  respectable.  Therefore  we  must  do  it 
too.  So  the  argument  runs,  generation  after  genera- 
tion, while  men,  deceived  into  believing  that  the 
standard  which  they  assist  in  erecting  and  maintain- 
ing is  erected  and  maintained  wholly  by  the  neighbors, 
continue  to  conform  to  the  neighborhood  standard  of 
things.  Furthermore,  there  is,  in  this  "  folio w-my- 
leader  "  conformity  with  neighbors'  standards,  not  one 
element  of  real  respectability.  Indeed,  some  of  the 
things,  in  which  neighbors  are  followed,  lurk  in  dark 
shadows.  Both  individual  self-respect  and  conscience 
are  frequently  violated  by  doing  as  the  Romans  do. 

The  goods  standard  of  neighborhood  competition  is 
not  final.  There  are  other  standards  such  as  physical 


96         KEDUCING  THE  COST  OF  LIVING 

strength  and  skill ;  mental  keenness ;  social  vision  and 
social  spirit ;  sympathy  and  neighboiiiuess  by  which 
men  may  be  classed.  These  items  of  personal  in- 
ventory are  cast  aside  in  the  ordinary  neighborhood 
estimate  of  men,  and  the  question  is  still  asked, — 
"What  have  they!" 

Neighborhood  competition  may  be  largely  elimi- 
nated. There  are  many  ways  of  conducting  life  other 
than  judging  and  rejudging.  A  philosophy  is  even 
now  abroad  which  insists  that  men  "judge  not  at  all." 
Perhaps  there  is  in  that  doctrine  a  grain  of  invaluable 
truth  for  a  self-respecting  age. 

For  the  present,  at  least,  the  goods  test  yardstick 
continues  to  be  employed  by  most  neighborhoods. 
The  constant  application  of  the  goods  test  leads  inevi- 
tably to  a  desire  on  the  part  of  individuals  for  the 
wherewithal  to  make  a  good  showing.  If  men  must 
be  measured,  they  may  at  least  put  forward  their  best 
foot  first.  Suppose  they  have  no  best  foot  ?  Suppose 
they  have  few  or  none  of  those  good  things  by  which 
the  world  judges!  "Why,  then,  the  obvious  thing  to 
do  is  to  get  them — quickly  ! 

3.    CINCH  JOBS 

The  pursuit  of  goods,  to  satisfy  one's  own  desire  for 
comforts  and  the  neighbors'  critical  tests  of  respecta- 
bility and  social  fitness,  leads  easily  and  naturally  to 
a  belief  that  goods  are  the  chief  thing  to  be  desired  in 
life.  Goods  become  objects  of  endeavor  and  since  the 
way  in  which  goods  are  ordinarily  procured  is  through 
income,  income  is  sought  religiously. 

The    saying    of  the   philosopher  is  changed  until 


GETTING  AHEAD  97 

it  reads,  "goods  is  the  principal  thing;  therefore, 
with  all  thy  getting,  get  goods."  The  philosophy 
echoes  and  reechoes  through  the  hearts  of  mankind, 
who  straightway  arise  and  set  out  in  the  pursuit  of 
goods. 

Goods  are  the  end  of  effort.  Men  therefore  seek  the 
means,  income,  in  order  that  they  may  have  goods. 
Couple  with  this  feeling  the  natural  disinclination  of 
some  people  to  exertion,  and  there  results  the  pursuit 
of  cinch  jobs. 

There  is  much  skepticism  abroad  on  the  subject  of 
cinch  jobs.  How  many  men  and  women  in  the  com- 
munity would  be  ashamed  to  take  a  job  which  paid  a 
salary  out  of  all  proportion  to  the  service  rendered  f 
How  many,  even  though  ashamed,  would  take  it  any- 
way! How  few  are  those  who  would  refuse  it  when 
the  test  of  success  is  goods  and  the  way  to  goods  lies 
through  income  1 

The  community  in  which  cinch  jobs  are  sought  by 
any  large  proportion  of  the  people  is  linking  hands 
with  ruin  and  disaster.  Only  as  the  individual  throws 
himself  into  the  struggle  with  ardor  and  enthusiasm 
can  the  fight  be  well  fought  and  the  victory  assured. 
The  prevalence  of  the  "cinch  job"  spirit  in  a  com- 
munity is  a  symptom  of  social  degeneracy  if  not  of 
individual  demoralization. 

4.    SINECURE  HOMES 

The  spirit  of  getting  goods,  of  making  a  show  with- 
out working  for  it,  is  not  confined  to  men.  It  has 
fastened  its  baneful  fingers  on  the  home,  where,  par- 
ticularly among  the  well-to-do,  it  plays  havoc  with 


98         KEDUCING  THE  COST  OF  LIVING 

home  life.  The  counterpart  of  the  cinch  job  for  the 
man  is  the  sinecure  home  for  the  woman. 

Society  preaches  the  sinecure  home  to  each  genera- 
tion. Girls  are  taught  to  believe  that  the  prime  requi- 
site in  a  man  is  the  ability  to  furnish  a  comfortable 
home.  His  morals,  his  attitude  toward  life,  his  habits, 
his  qualities  are  thrown  into  one  side  of  the  balance. 
Into  the  other  side  is  thrown  his  income.  Too  often 
the  income  is  permitted  to  outweigh  all  other  consider- 
ations. Mothers,  deceiving  themselves  with  the  belief 
that  they  have  the  interest  of  their  daughters  at  heart, 
cajole,  flatter,  plead,  and  insist,  until  the  daughter 
yields  or  else,  in  desperation,  throws  over  the  whole 
idea  of  home  life,  and  enters  upon  the  pursuit  of  a 
career.  More  well-to-do  girls  are  driven  from  home 
and  home  ideals  into  the  world  of  affairs  by  the  at- 
tempts of  the  parents  to  maintain  the  tawdry  respecta- 
bilities of  life  than  appear  at  first  sight.  The  goods 
standard  glitters  attractively  before  the  eyes  of  the 
seventeen -year-old  girl.  Its  splendor  pales  as  she 
nears  twenty-five  and  does  not  shine  out  strong  again 
until  she  reaches  that  uncertain  age  of  maturity  at 
which  her  earlier  ambition  and  beliefs  yield  place  to 
adipose  respectability. 

Well-to-do  homes  all  over  the  country  are  sheltering 
women — wives  and  daughters — whose  service  to  society 
can  be  summed  up  in  the  one  word, — "eminently 
respectable."  They  serve  not  at  all.  They  render  in 
return  for  the  many  things  which  they  enjoy  nothing 
except  obedience  to  the  dictates  of  fashion  and  of 
morality.  They  move  with  the  crowd,  have  a  good 
time,  play  about,  cause  trouble  occasionally,  usually 


GETTING  AHEAD  99 

pass  unnoticed,  despite  their  blatant  attempts  at  dis- 
play, and  at  last  sink  into  an  early  senility  without  in 
any  way  detracting  from  the  efficiency  or  progress  of 
society. 

Both  the  cinch  job  and  the  sinecure  home  are  a 
social  burden.  If  men  and  women  live  splendidly 
without  rendering  a  return  in  service  commensurate 
with  the  living  which  they  obtain,  society  pays  the 
bill.  Whether  this  bill  is  big  or  little  is  beside  the 
question. 

5.  THE  ROAD  TO  ISOLATION 
The  unending  competition  for  goods  has  left  men 
with  an  unspeakable  horror  of  isolation.  They  cannot 
bear  to  be  alone.  On  the  one  hand,  there  is  little  or 
nothing  about  which  they  wish  to  commune  with  them- 
selves. On  the  other  hand,  they  have  grown  so  ac- 
customed to  "showing  the  neighbors  "  that  a  life  with- 
out neighbors  to  "show"  is  inconceivable.  Even 
though,  in  their  younger  days,  they  were  self-analytical, 
since  they  grew  to  manhood  and  womanhood  they  have 
had  little  occasion  to  understand  themselves.  They 
have  even  ceased  to  inquire  what  manner  of  men  they 
are.  Only  there  is  a  lingering  suspicion  that  if  they 
should  stop  long  enough  to  knock  at  the  door  of  con- 
sciousness, there  would  appear  at  the  wicket  an  ugly, 
distorted,  wizened  face,  the  mere  caricature  of  the 
being  who  once  lived  there.  Sensing  the  presence  of 
such  a  phantom,  they  are  afraid. 

Men  and  women  whose  lives  have  been  fused  and 
forged  in  the  white  heat  of  the  life  struggle  do  not  care 
to  face  themselves  because,  as  the  years  go  by,  they 


100       EEDUCING  THE  COST  OF  LIVING 

become  more  arid  more  certain  of  what  they  would 
discover.  There  is  110  pleasure  iu  facing  a  real  self 
which  is  a  leering  mask,  welded  over  the  possibilities 
of  what  might  have  been. 

The  art  of  self-communion  has  died  before  the  dread 
of  self-revelation.  To  sit  at  rest  under  a  shady  tree  ; 
to  wander  alone  for  hours  through  the  woods  and 
under  the  stars  ;  to  paddle  out  over  the  shadowy  depths 
of  the  lake,  alone;  to  contemplate,  and  enjoy, — these 
are  phases  of  life  little  known  in  the  modern  world. 
They  are  little  known  because  they  imply  that  dread- 
ful task  effacing  things  as  they  are  and  that  still  more 
awful  necessity  of  facing  things  as  they  may  be  and 
will  be.  Men  and  women  cling  to  their  companions 
in  order  that  their  worst  fears  may  not  be  realized. 

Men  dread  isolation  ;  seek  madly  to  pile  up  this 
world's  goods,  and  rushing  into  the  market-place  they 
crowd  close  among  their  companions,  their  souls  crying 
aloud  for  succor  and  encouragement  After  years  of 
such  a  life,  they  awake  to  the  presence  of  an  isolation 
more  frightful  than  any  other  which  the  world  can 
conceive, — the  isolation  of  the  individual  in  a  crowd, 
the  marooning  of  a  human  soul  on  the  island  of  goods 
which  it  has  heaped  together. 

The  road  to  isolation  lies  through  a  struggle  for 
supremacy  in  which  dead  things  are  the  insignia  of 
success.  He  who  would  draw  near  to  his  neighbor 
must  first  bare  his  own  soul  to  himself. 

The  struggle  for  goods  is  itself  a  bootless  one.  He 
who  succeeds  is  hated,  feared,  cursed,  flattered,  and 
fawned  upon.  How  shall  he  know  that  the  many  wlio 
hover  about  him  are  vultures  awaiting  the  time  when 


GETTING  AHEAD  101 

there  shall  be  a  feast  of  carrion  f    He  who  fails  has 
already  passed  out  of  life. 

6.    THE  PRICE  OF  GETTING  AHEAD 

The  struggle  is  frightful.  Whether  there  is  some- 
thing or  nothing  gained,  the  income  earner  is  called 
upon  to  foot  the  bill.  As  the  contest  grows  tenser, 
the  demand  for  funds  grows  more  insistent.  The 
earner  fights  like  a  fiend,  laying  down  his  hopes,  his 
tastes,  his  years  and  his  health  on  the  altar  of  greater 
income.  What  though  the  struggle  is  endless  ?  What 
though  the  ribbons  and  lace,  the  grand  liveries  and 
the  costly  furnishings  are  only  the  dross  of  home  life  ? 
What  though,  underneath  the  veneer  of  his  respect- 
ability, the  spirit  within  the  man  tells  him  that  the 
end  of  this  battle  is  death  ?  The  demands  cannot  be 
ignored — the  demands  from  the  folks  at  home. 

The  people  at  home  are  trying  to  get  ahead.  Son  is 
at  college,  buying  his  way  into  fame ;  daughter  is  in 
the  gay  whirl,  buying  her  way  to  a  husband  ;  mother 
is  in  society,  buying  her  way  to  a  position,  where  she 
will  be  able  to  do  the  best  by  son  and  by  daughter. 
Father  pays ! 

All  families  do  not  sacrifice  their  dear  ones  on  the 
altar  of  getting  ahead.  All  families  do  not  strive  for 
futility.  There  are  good  things — many  of  them — 
coming  out  of  Nazareth.  Yet  the  well-to-do  struggle 
for  supremacy  is,  on  the  whole,  a  tragedy. 

The  struggle  with  the  neighbors  is  omnivorous.  It 
takes,  in  income,  all  that  men  have.  Of  strength  and 
health  it  devours  all  that  they  possess.  For  a  reward, 


102       KEDUCESTG  THE  COST  OF  LIVING 

it  leaves  with  them  treasures  already  cankered  with 
rust. 

The  standard  of  goods  is  raised,  the  cost  of  living  is 
pushed  upward.  There  are  many,  particularly  among 
the  well-to-do,  who  have  fallen  into  line  and  are  keep- 
ing the  pace.  They  are  paying  dearly  for  their  places, 
and  so  long  as  they  seek  satisfaction  in  the  possession 
of  things,  they  will  continue  to  pay  a  higher  and 
higher  cost  of  life. 


vin 

PEICE  CHANGES  IN  THE  NECESSAEIES 
OP  LIFE 

1.      EUNNING  THE  EACE  ON  NlNE  HUNDRED 

THOSE  who  cannot  pursue  the  phantom  of  social 
emulation  feel  the  pinch  of  the  rising  cost  of  living 
none  the  less  sharply.  Whatever  may  happen  to  the 
luxuries  of  life,  the  necessaries  must  always  be  secured. 
The  provision  of  "necessaries"  is  the  problem  that 
stares  full  into  the  face  of  the  man  who  is  raising  a 
family  on  nine  hundred  a  year,  or  less. 

There  are  families  in  the  United  States  living  on  less 
than  nine  hundred.  Despite  the  languid  inquiry  of 
the  well-off, — "  How  do  they  do  it?"  men  and  women 
are  everywhere  bringing  families  into  the  world,  and 
raising  them  on  that  amount. 

Incomplete  though  they  may  be,  personal  experi- 
ences will  convince  any  thinking  person  of  the  general 
prevalence  of  under- nine-hundred  incomes.  Nine 
hundred  dollars  is  about  three  dollars  for  each  working 
day.  How  many  men  get  such  an  amount  ?  Does  the 
baker's  man  or  the  butcher's  helper,  the  motorman  or 
the  street  laborer?  Such  wage  figures  as  can  be  found 
seem  to  show  pretty  clearly  that  fully  half  of  the  men 
engaged  in  American  industry  earn  less  than  $600  per 
year,  while  three-quarters  receive  less  than  $750.  * 

1  "Wages  in  the  United  States,"  Scott  Nearing,  New  York,  The 
Macmillan  Company,  1911,  Chapter  X. 


104       BEDUCING  THE  COST  OF  LIVING 

The  great  majority  of  the  population  is  evidently 
living  somewhere  just  above  or  just  below  the  nine- 
hundred-a-year  basis. 

When  families  live  on  nine  hundred  a  year,  or 
thereabouts,  they  have  extraordinary  difficulty  to 
make  ends  meet.1  Their  struggle  is  a  struggle  for 
necessaries.  For  them  the  race  is  a  race  with  malnutri- 
tion and  insauitation.  Families  living  on  nine  hundred 
a  year  therefore  feel  the  increase  in  prices  with  ag- 
gravated keenness. 

The  changing  form  of  American  life  bears  on  the 
nine- hundred- dollar  family.  The  same  changes  which 
have  built  cities  have  placed  the  nine-hundred-dollar 
family  in  the  cities.  The  same  changes  which  have 
raised  the  standards  of  life  for  the  well-to-do  have 
raised  them  for  those  less  favored.  Income  is  in 
many  cases  no  greater,  and  rising  standards  of  Amer- 
ican family  life  make  the  nine-hundred-dollar  family 
dissatisfied.  The  real  interest  of  the  nine-hundred- 
dollar  family  does  not  lie,  however,  in  changing  stand- 
ards, but  in  changing  prices. 

2.    THE  NINE- HUNDRED -DOLLAR  FAMILY 
AND  THE  CHANGE  IN  PRICES 

The  ordinary  family  of  three  children  living  in  a 
large  town  or  city  on  nine  hundred  dollars  must  have 
its  expenditures  carefully  planned  if  it  is  to  live  de- 
cently and  get  through  the  year  without  a  deficit. 
Such  a  family  spends  about  $350  a  year  for  food.  A 
rise  of  twenty  per  cent,  in  the  cost  of  food  is  equiva- 

1  "  Financing  the  Wage  Earner's  Family,"  Scott  Nearing,  New 
York,  B.  W.  Huebsch,  1913. 


PEICE  CHANGES  105 

lent  to  between  seven  and  eight  per  cent,  of  the  entire 
family  income.  Such  a  price  change  must  be  followed 
by  a  severe  readjustment  of  expenditures. 

While  price  changes  are  thus  vital  to  the  nine-hun- 
dred-dollar family,  they  are  none  the  less  interesting 
to  the  family  on  two  or  three  thousand  dollars  a  year 
which  is  spending  from  $500  to  $800  on  its  food.  For 
the  well-to-do,  price  increases  mean  a  decrease  in  the 
number  of  luxuries  ;  for  the  nine-hundred-dollar  fam- 
ily they  mean  a  decrease  in  the  comforts  or  necessaries. 

3.  THE  GENERAL  INTEREST  IN  PRICE  CHANGES 
The  man  on  the  street  may  not  understand  the  radi- 
cal transformation  which  has  taken  place  in  the  home, 
the  city,  and  the  methods  of  making  a  living.  He  is 
fully  aware,  however,  that  during  the  past  twenty 
years  his  best  energies  have  been  barely  sufficient  to 
increase  his  wages  as  fast  as  the  increase  in  the  prices 
of  the  things  which  he  eats  and  wears.  He  does  know 
that  prices  are  high,  with  a  marked  tendency  to  go 
higher.  He  does  know  that  a  comparison  between 
his  grocer's  book  and  his  pay  envelope,  made  twenty 
years  ago  and  again  to-day,  leads  him  to  believe  that 
it  is  harder  for  him  to  get  the  same  living  now  that  he 
secured  then.  The  man  on  the  street  knows  these 
things,  and  knowing,  he  is  dissatisfied. 

Mere  knowledge  is  not  enough,  however.  Even 
dissatisfaction  will  prove  ineffective  in  finding  a  rem- 
edy unless  it  is  based  on  careful  study.  Why  have 
prices  advanced  ?  Unless  the  man  on  the  street  can 
answer  that  vital  question,  he  can  scarcely  hope  to 
solve  the  cost  of  living  problem. 


106       EEDUCING  THE  COST  OF  LIVING 

It  is  not  possible  at  the  present  stage  of  knowledge 
about  prices  to  make  final  statements  regarding  the 
reasons  for  price  changes.1  In  the  future,  price 
changes  will  doubtless  continue,  as  they  have  in  the 
past,  until  their  riddle  is  finally  solved.  Certain  ele- 
ments, like  scarcity,  that  go  to  the  fixing  of  prices, 
are  fairly  well  understood.  In  the  main,  however, 
price  changes  are  an  enigma.  The  available  price 
knowledge  contained,  for  the  most  part,  in  state  and 
Federal  reports  giving  the  bare  price  facts,  is  suggest- 
ive, if  not  conclusive. 

4.    THE  PRICE  FACTS 

The  difficulties  involved  in  securing  reliable  and 
satisfactory  price  figures  are  very  great.  Wholesale 
prices  may  always  be  found  with  comparative  ease ; 
but  since  the  consumer  pays  retail  prices,  and  since 
wholesale  and  retail  prices  do  not  change  in  the  same 
ratio  from  year  to  year,  they  are  a  poor  makeshift  for 
one  who  is  seeking  to  find  facts  about  the  cost  of  the 
things  which  are  bought  over  the  counter.  Another 
complication  arises  from  the  fact  that  retail  prices 
vary  from  one  town  to  another,  and  even  from  one 
part  of  the  city  to  another.2  Furthermore,  the  avail- 
able retail  price  knowledge  does  not  cover  all  pur- 
chased commodities.  Although  the  workingman 
spends  less  than  half  of  his  income  for  food,  the 

1  There  are,  of  course,  the  elaborate  theoretical  discussions  about 
prices.     Based  largely  on  hypotheses,  they  are  philosophic,  rather 
than  scientific  or  prophetic. 

2  See  Appendix  D. 


PEICB  CHANGES  107 

statements  concerning  the  cost  of  living  usually  refer 
to  food  prices  almost  exclusively.  This  incomplete- 
ness of  statement  arises  from  the  fact  that  practically 
no  authentic  figures  are  available  to  show  the  cost  of 
rent  and  the  retail  prices  of  clothing,  fuel,  and  light. 
To  be  sure  there  is  some  fragmentary  material  cover- 
ing rent  in  small  areas,  and  a  few  kinds  of  clothing  ; 
nevertheless,  the  really  authoritative  data  on  price 
changes  relate  to  foods  alone.  Even  in  the  case  of 
food  prices  the  figures  are  neither  complete  enough 
nor  sufficiently  extended  in  time  to  warrant  more  than 
tentative  deductions. 

Of  recent  publications  which  have  dealt  with  food 
prices,  the  most  extensive  study  was  published  by  the 
Massachusetts  Commission l  on  the  cost  of  living.  Al- 
though a  large  body  of  data  is  brought  together,  the 
arrangement  is  poor,  and  the  analysis  inadequate.  A 
recent  report  of  the  Washington  Bureau  of  Labor  Sta- 
tistics 2  contains  a  short  section  on  the  cost  of  living 
in  Washington,  in  which  a  comparison  is  made  be- 
tween the  wholesale  prices  of  food  in  1890  and  in  1910. 
The  work  seems  to  be  carefully  done.  The  reports  of 
the  Bureau  of  Statistics  of  New  Jersey  contain  by  far 
the  most  intrusive  analysis  of  the  cost  of  living. 
Fifty-two  articles  of  food  are  selected,  and  during 
the  month  of  June  agents  of  the  Bureau  secure  retail 
prices  on  this  bill  of  goods  in  sixty-two  towns  scat- 
tered throughout  the  state,  buying  each  year  of  the 
same  tradesmen.  Since  1890  the  United  States  Bureau 

1  "The  Cost  of  Living,"  House  Document,  1750,  Boston,  1910. 
'Seventh   Biennial   Report  of  the  Bureau  of  Labor  Statistics, 
1909-1910,  Olympia,  Wash.,  1911. 


108       KEDUCING  THE  COST  OF  LIVING 

of  Labor  has  compiled  statistics  of  wages  and  prices. 
Retail  prices  for  this  purpose  have  been  secured  iu  a 
manner  similar  to  that  adopted  in  New  Jersey.  Un- 
fortunately, however,  the  number  of  localities  selected 
has  been  so  small  in  comparison  with  the  entire  country 
that  the  ultimate  value  of  the  data  must  be  open  to 
question.  A  recent  bulletin  states  that  "  data  from 
this  report  was  secured  from  more  than  650  retail  mer- 
chants1 (651  exactly),  from  168  coal  dealers,  and  61  gas 
companies."  "  The  (39)  cities  included  in  the  report 
are  important  industrial  cities,  representing  thirty-two 
states."  "Within  the  thirty-nine  cities  live  one-fifth 
of  the  total  number  of  people,  two-fifths  of  the  urban 
population,  and  approximately  one-third  of  those  en- 
gaged in  gainful  occupations  (not  including  those  in 
agricultural),  in  continental  United  States. "  2  Further, 
the  Federal  investigation  covers  only  fifteen  articles 
of  food,  though  these  fifteen  articles  include  two- 
thirds  of  the  entire  food  purchases  by  a  workiugmau'  s 
family.  Thus  the  Federal  figures  involve  only  a  por- 
tion of  food  items,  and  only  an  infiuitesimally  small 
number  of  merchants.  Neither  is  the  selection  of 
articles  so  valid  as  that  adopted  in  New  Jersey.  Since 
the  price  data  are  collected  for  the  purpose  of  com- 
parison with  wage-earners'  incomes,  the  obvious  thing 
to  do  would  be  to  select  those  foods  which  wage-earners 
buy.  This  method  has  been  followed  in  New  Jersey  ; 

xln  any  one  city  of  half  a  million  there  would  be  perhaps  1,800 
retail  food  dealers — three  times  the  total  number  covered  by  the 
Bureau  in  their  entire  investigation  of  the  thirty-nine  cities. 

2  Retail  Prices,    Bulletin  105,  Part  I,  Wash.  Govt.  Print., 
pp.  5  and  6. 


PEICE  CHANGES  109 

but  note  that  the  list  of  the  United  States  Bureau  of 
Labor  includes  among  fifteen  items  three  meat  items 
— "  sirloin  steak,"  " round  steak,"  and  "  rib  roast " — 
but  no  other  cuts  of  beef.  As  a  rule,  it  is  the  cheaper 
cuts,  and  not  these  more  expensive  ones,  that  the 
wage-earner  buys.  So,  too,  their  quotation  is  for 
creamery  butter  alone,  although  the  wage-earner  al- 
most invariably  buys  the  cheaper  grades  of  butter. 

5.    WHAT  HAS  HAPPENED  TO  PRICES? 

Whatever  the  dependability  of  the  New  Jersey 
figures,  their  method  of  collection  certainly  wins  for 
them  first  place  among  the  retail  price  statistics.  They 
show,  as  do  all  of  the  other  figures  available,  that 
since  1898  the  prices  of  most  food  products  have  been 
rising,  though  the  rate  at  which  they  have  risen 
varies  extremely.  All  of  the  articles  included  in  the 
New  Jersey  list  have  risen  about  thirty  per  cent. 
Among  the  items,  rice  and  oatmeal  remained  sta- 
tionary ;  butter,  wheat  flour,  beef,  and  pork  rose  very 
rapidly ;  while  canned  tomatoes  and  prunes  rose  slowly. 
The  greatest  increase  is  in  bacon,  which  almost  doubled 
in  price. 

Without  going  into  further  detail  regarding  price 
increases,1  it  may  be  said  that  such  facts  as  are  available 
show  that  the  prices  of  food  have  risen  generally  dur- 
ing the  past  two  decades,  but  faster  in  some  districts 
than  in  others.  A  very  fair  idea  of  the  changes  may 
be  gained  from  a  summary  of  four  groups  of  figures 
relating  to  food  prices.  Two  of  the  lists  are  for  whole- 
sale prices  and  two  for  retail ;  the  periods  covered  are 
1  For  additional  figures,  see  Appendix  B. 


110       EEDUCING  THE  COST  OF  LIVING 


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"All  articles"  have  risen.  An  examination  of  the 
table  shows  that  this  rise  is  very  unequally  distributed. 
The  percentage  of  increase  is  much  greater  in  meats, 


PEICE  CHANGES  111 

dairy  products,  and  cereals,  than  it  is  in  vegetables, 
fruits,  and  sugar  foods.  The  only  general  deduction 
that  can  justifiably  be  made  from  the  table  is  that 
sugar,  vegetables,  and  cereals  show  the  least  increase 
in  price,  while  dairy  products  and  meat  show  the 
greatest  increase.  Collected  by  different  methods  and 
from  different  sources,  the  figures  nevertheless  point  to 
the  greatest  price  increase  in  the  products  which  are 
secured  directly  from  domestic  animals. 

6.  THE  KINDS  OF  FOOD  THAT  PEOPLE  BUY 
At  this  point  it  is  customary  to  make  a  comparison 
between  wages  and  the  rise  in  the  price  of  "  all  articles. " 
A  moment's  reflection  will  convince  the  reader  that 
such  a  comparison  is  not  permissible.  Some  items  are 
more  generally  purchased  than  others.  The  diet  is  not 
composed  of  a  number  of  statistically  compiled  articles, 
used  in  like  proportions  ;  but  of  a  number  of  articles 
selected  because  of  necessity  or  tradition,  and  consumed 
in  very  different  proportions.  Meat,  for  example, 
forms  a  substantial  part  of  the  wage-earner's  diet,  while 
the  sugar  bill  for  the  same  family  is  but  one-fourth  as 
great  as  the  meat  bill.  The  fairest  analysis  of  food 
costs  is  therefore  made  by  comparing  the  prices  of 
different  kinds  of  food  with  the  amounts  of  those  kinds 
of  food  actually  consumed. 

The  amount  expended  for  different  kinds  of  food  is 
readily  determined.1  Although  it  varies  with  nation- 
ality, it  is  roughly  measurable.  While  the  proportion 
of  expenditure  for  meat  and  fish  increases  slightly  with 
the  increase  in  income,  and  the  proportion  of  expendi- 
1  See  Appendix  E. 


112      EEDUCING  THE  COST  OF  LIVING 

ture  for  cereals  decreases  slightly,  the  percentages 
expended  by  different  income  groups  are  remarkably 
uniform.  One- third  of  the  income  goes  for  meat  and 
fish  ;  one-fifth  for  eggs,  milk,  and  dairy  products ;  one- 
fifth  for  cereals  ;  one-eighth  for  vegetables  and  fruit ; 
and  one-twelfth  for  sugar  and  sugar  products.  A 
comparison  between  these  data  and  the  data  in  the  pre- 
vious table  showing  the  increased  cost  of  the  various 
kinds  of  food  shows  that  the  most  rapid  price  increases 
have  occurred  in  the  case  of  three  food  products  which 
are  most  largely  consumed.  The  rise  in  prices  was  led 
by  dairy  products  and  meats.  These  two  items  alone 
constitute  more  than  half  of  the  total  food  expenditure 
of  the  family  under  $900. 

The  fact  that  those  foods  which  are  consumed  in  the 
largest  quantities  have  shown,  generally  speaking,  the 
greatest  increase  in  cost,  while  the  foods  least  used 
have  shown  the  least  increase,  cannot  be  over- 
emphasized. Meats  and  dairy  products,  upon  which 
the  American  is  primarily  dependent  for  the  nitrogen 
element  in  his  diet,  have  led  in  the  increase.  The 
Washington  Bureau  of  Labor  Statistics  comments  on 
this  relative  increase  as  follows:1  "In  the  list  of 
commodities  which  have  advanced  most  rapidly  are 
included  such  staples  as  rye,  graham  and  wheat  flour, 
rice,  eggs,  lard,  beans,  ham,  bacon,  and  fresh  meats,  the 
average  increase  in  cost  of  the  above  commodities  for 
the  period  mentioned  being  seventy -two  per  cent. 
Scarcely  any  article  has  advanced  more  rapidly  than 
wheat  flour,  which  is  undoubtedly  our  most  important 
food  commodity.  .  .  .  The  commodities  which 
1  Washington  Bureau  of  Labor,  1911,  Op.  Cit.,  pp.  39-40. 


PEICB  CHANGES  113 

show  the  least  increase  in  price  are  various  kinds  of 
canned  and  dried  fruits,  canned  vegetables,  canned  fish, 
and  similar  articles,  which  would  not  be  classed  among 
absolute  necessaries.  Taken  as  a  group  they  constitute 
but  a  small  portion  of  the  ordinary  household  fare." 
A  similar  comment  is  made  by  the  New  Jersey  Bureau 
of  Statistics.1 

In  so  far  as  food  is  concerned,  the  facts  seem  indis- 
putable. Meats,  dairy  products,  and  cereals  have  led 
the  increase  in  food  prices.  Meats,  dairy  products, 
and  cereals  are  the  staples  of  American  diet. 

7.  PRICE  INCREASES  IN  OTHER  COMMODITIES 
The  figures  showing  the  prices  of  shoes  and  clothing 
are  very  inadequate,  largely  because  they  are  whole- 
sale prices.  It  is,  however,  interesting  to  note  that  the 
wholesale  prices  published  by  the  United  States  Bureau 
of  Labor 2  show  that  the  price  of  blankets  between  1890 
and  1912  rose  about  forty  per  cent,  for  cotton  blankets, 
but  only  about  ten  per  cent,  for  woolen  blankets ;  that 
during  the  same  period  the  price  of  boots  and  shoes 
rose  between  ten  and  twenty  per  cent.  ;  that  carpets 
increased  an  equal  amount ;  that  the  increase  in  the 
price  of  cotton  thread,  yarns,  and  cloths  varied  from 
ten  to  forty  per  cent. ;  that  all  kinds  of  hosiery  show  a 
decrease  in  price  of  from  two  to  forty  per  cent.  ;  that 
underwear  remained  about  stationary  in  price ;  that 
woolen  and  part  woolen  cloths  for  suits  and  overcoats 

1  Bureau  of  Statistics  of  New  Jersey,  1911,  Camden,  1912,  p.  148. 
1  United  States  Bureau  of  Labor  Bulletin  114,    Wash.  Govt. 
Print.,  1913. 


rose  in  price  from  ten  to  forty  per  cent.  A  careful 
study  of  these  wholesale  price  figures  shows  a  preva- 
lence of  small  price  advances.  Among  the  sixty-five 
articles  of  cloths  and  clothing  listed,  twenty-two  de- 
creased in  price ;  seventeen  rose  less  than  ten  per  cent.  ; 
eighteen  rose  from  ten  to  twenty-four  per  cent.  ;  and 
only  eight  rose  more  than  twenty-five  per  cent.  Price 
changes  in  clothing  during  the  past  twenty  years  are 
apparently  not  considerable.  Certainly  they  are  not 
in  the  same  class  with  changes  in  the  price  of  meats, 
dairy  products,  and  some  cereal  foods. 

For  fuel  and  light,  which  is  a  relatively  small  item 
in  the  workiugman's  budget,  the  wholesale  figures 
(1890  to  1912)  show  a  decrease  in  the  price  of  caudles 
often  per  cent.  ;  a  decrease  in  matches  of  nearly  thirty 
per  cent.  ;  an  increase  in  coke  of  nearly  twenty  per 
cent.  ;  and  a  slight  increase  in  the  price  of  petroleum. 
During  the  same  period,  anthracite  and  bituminous 
coal  rose  in  price,  the  former  for  domestic  sizes  from 
thirty  to  forty  per  cent.,  and  the  latter  from  two  to 
sixty  per  cent. 

Granting  the  obvious  incompleteness  of  such  facts,  it 
appears  beyond  any  possibility  of  cavil  that  those  food 
products  for  which  the  largest  part  of  the  food  expen- 
ditures is  made  have  increased  most  rapidly  in  price. 
In  some  cases  (bacon,  for  example)  they  have  actually 
doubled  in  the  past  two  decades.  The  wage-earner, 
therefore,  faces  the  fastest  rise  in  the  prices  of  those 
commodities  which  he  has  been  taught  to  want  most. 

The  future  seems  to  hold  no  immediate  hope,  so  long 
as  the  present  method  of  price-fixing  prevails.  Irving 
Fisher,  who  has  done  so  much  work  in  this  field, 


PEICE  CHANGES  115 

writes, — l  l '  Whatever  the  mutual  adjustments  of  price- 
levels  between  countries  by  international  trade  and  the 
redistribution  of  the  stocks  of  gold,  I  believe  the  world 
as  a  whole  is  destined  to  see  for  many  years  to  come  a 
rapidly  rising  tide  of  prices. " 

Confronted  by  this  dark  prophecy,  the  worker  who 
has  analyzed  his  possible  wage  increase  may  well  turn 
from  a  social  system  which  offers  neither  opportunity 
for  any  great  advance  in  wages,  nor  any  hope  for  a 
stay  in  the  increase  of  prices,  to  demand  in  his  most 
vigorous  style  that  some  speedy  means  be  adopted  to 
discover  why  prices  are  rising,  and  by  what  means  a 
new  adjustment  may  be  effected. 

1  "  Will  the  Present  Upward  Trend  of  World  Prices  Continue  ?  " 
Irving  Fisher,  Am.  Econ.  Review,  September,  1912,  p.  558. 


IX 
THE  CAUSES  OF  ADVANCING  PRICES 

FROM  EFFECT  TO  CAUSE 

THE  inquiring  mind  turns  naturally  from  a  summary 
of  facts  to  an  analysis  of  causes.  Prices,  particularly 
the  prices  of  those  things  which  enter  most  largely  into 
the  expenditure  list  of  the  average  citizen,  are  rising. 
Should  the  situation  remain  unchanged,  there  is  every 
reason  to  believe  that  prices  will  continue  to  rise.  Why 
should  this  be  so  ? 

Much  of  the  controversy  over  price  increase  has  as- 
sumed that  there  was  some  one  cause,  or  some  chief 
cause,  to  which  all  of  the  change  in  prices  could  be 
ascribed.  Ascertain  this  one  cause,  discover  its  solu- 
tion, and  the  problem  is  solved. 

The  citizen  living  amid  the  infinite  complexities  of 
twentieth  century  civilization  need  not  be  reminded 
that  the  causes  of  social  movements  are  multiple  in 
their  origin  as  well  as  in  their  action.  There  is  no 
single  cause  to  which  any  of  the  complex  phenomena 
of  modern  society  can  be  ascribed.  To  this  rule  the 
cost  of  living  problem  is  no  exception.  There  is  not 
one  cause,  but  there  are  causes  for  increasing  prices. 

The  citizen  of  the  twentieth  century,  living  in  cities 
and  towns,  and  paying  the  prices  for  most  of  the  things 
which  he  needs,  is  brought  face  to  face  with  a  situation 
that  threatens  the  unity  of  his  family  and  the  main- 
tenance of  his  standard  of  living.  What  action  shall 


THE  CAUSES  OF  ADVANCING  PEICES    117 

he  take  to  remedy  the  situation  ?  Plainly,  he  cannot 
act  until  he  is  familiar  with  the  facts  in  the  case.  Aside 
from  theoretical  considerations,  there  is  in  existence  a 
large  body  of  economic  facts  which  throw  sufficient 
light  on  the  general  problem  to  permit  of  some  sug- 
gested solution.  The  theoretical  causes  of  the  cost  of 
living  have  been  made  the  subject  of  elaborate  analysis 
and  discussion.  There  remains  the  fertile  field  of 
available  facts,  together  with  the  deductions  which  may 
be  made  from  them. 

The  forces  which  materially  affect  the  cost  of  living 
may  be  roughly  divided  into  three  groups. 

1.  Economic  forces  which  operate  on  prices. 

2.  Artificial  manipulation  of  prices. 

3.  The  increase  in  the  cost  of  production. 

Though  this  division  is  by  no  means  final,  and  although 
the  groups  are  not  mutually  exclusive,  it  is  adopted 
because  it  affords  the  most  workable  classification  of 
the  elements  which  are  apparently  operating  on  the 
cost  of  living. 

2.  ECONOMIC  FORCES  AND  PRICE  CHANGES 
Under  economic  forces  fall  those  forces  which  arise 
from  the  nature  of  modern  industrial  society.  Does 
the  population  increase  as  fast,  or  faster,  than  the  food 
supply  ?  The  old  questions  must  be  reopened  ;  the 
old,  old  arguments  must  be  restated  ;  and  some  conclu- 
sion arrived  at,  because  it  has  not  been  finally  decided 
that  the  ideas  of  Mai  thus  concerning  the  dangers  of 
over-population  were  wholly  visionary.  Particularly 
here  in  the  United  States,  which  is  each  year  the 


118       KEDUCING  THE  COST  OF  LIVING 

Mecca  of  nearly  a  million  immigrants  seeking  eco- 
nomic salvation  in  a  new  world,  the  matter  may  well 
claim  attention.  If  population  increases  faster  than 
the  supply  of  food,  the  United  States  will  ultimately 
be  forced  to  import  her  food  instead  of  producing  it. 
Meantime,  the  prices  will  steadily  rise  under  the  pres- 
sure of  increasing  demand  without  a  corresponding 
supply.  The  increase  in  the  quantity  of  gold,  in  those 
countries  which  have  adopted  a  gold  standard,  is  gen- 
erally believed  to  exercise  an  upward  push  on  prices. 
No  individual  and  no  class  of  people  is  responsible  for 
this  increase,  yet  its  effect  on  prices  is  none  the  less 
sure.  In  the  same  manner,  an  increase  in  the  propor- 
tion of  labor  which  is  engaged  in  rendering  personal 
services  to  the  remainder  of  society  throws  an  addi- 
tional burden  on  those  laborers  who  remain  in  indus- 
try. Unless  a  compensating  advantage  arises  through 
improved  machinery  or  methods,  there  must  inevi- 
tably be  a  rise  in  price  to  compensate  for  the  additional 
labor.  On  the  other  hand,  the  processes  of  economic 
evolution,  leading  to  big  business  as  it  exists  to-day, 
place  in  the  hands  of  a  small  coterie  of  men  the  power 
to  fix  a  monopoly  price  on  their  output,  within  certain 
limits,  well  recognized  by  those  familiar  with  monop- 
oly value  and  monopoly  price.  The  products  will  be 
sold  to  the  consumer  at  a  price  fixed  at  a  point  which 
has  been  described  by  the  very  telling  railroad  phrase, 
"  all  that  the  traffic  will  bear." 

3.     ARTIFICIALLY  INDUCED  PRICE  CHANGES 
Economic  forces  place  men  in  a  position  where  they 
may  charge  monopoly   prices.     Are  they  doing  it? 


THE  CAUSES  OF  ADVANCING  PEICES    119 

Have  they  been  responsible  for  pushing  up  the  cost  of 
living  through  the  exercise  of  their  monopoly  advan- 
tage? The  popular  opinion  would  not  hesitate  to 
make  an  affirmative  reply. 

There  are  many  forces  operating  in  the  economic 
world  which  are  far  beyond  the  power  of  immediate 
control.  Population  increase,  changing  gold  supply, 
discovery  and  invention  of  improved  methods  and 
processes — over  these  forces  men  may  exercise  but 
meager  sway.  Finally,  clever  plotting  and  planning 
will  bend  them  to  the  service  of  mankind.  For  the 
time  being  they  must  be  counteracted  or  offset,  since 
they  will  continue  to  operate. 

Artificial  restrictions  upon  economic  society,  of 
which  monopoly  power  is  a  peculiarly  significant  illus- 
tration, are  in  no  such  category.  Although  based  on 
tradition,  and  entrenched  behind  bulwarks  of  financial 
power,  they  are  a  direct  product  of  human  activity, 
and  as  such  they  can  be  made  the  absolute  creatures  of 
human  decision. 

How  different  the  two  things  appear  when  they  are 
set  side  by  side  !  New  chemical  processes,  together 
with  the  discovery  of  new  fields,  greatly  increase  the 
available  supply  of  gold.  The  effect  of  this  increase 
in  supply  upon  the  prices  of  commodities  will  be  com- 
mented on  in  detail.  Suffice  it  to  say  that  the  increase 
in  the  amount  of  gold,  other  things  being  equal,  does 
raise  the  price  of  other  products.  Over  this  increase 
in  gold  production  man  has  no  immediate  control. 
To  be  sure  it  would  be  physically  possible  to  secure  an 
international  agreement  by  virtue  of  which  all  gold 
mines  could  be  placed  under  government  control,  and 


120       KEDUCING  THE  COST  OF  LIVING 

the  supply  of  gold  regulated.  Such  an  outcome  is 
theoretically,  but  not  practically,  possible.  Consider 
on  the  other  hand  a  franchise  monopoly  under  which  a 
gas  company  delivers  gas  to  a  city  at  an  exorbitant 
price.  The  voters  of  the  city — a  coherent,  social  unit 
— by  registering  the  wish,  can  take  the  gas  company's 
plant  for  public  use,  through  the  right  of  eminent  do- 
main, granted  to  them  under  an  act  of  the  legislature, 
or  at  the  expiration  of  the  franchise,  they  can  place 
the  plant  under  their  own  control.  Any  monopoly, 
socially  granted,  is  subject  to  similar  restrictions. 

In  so  far  as  price  changes  are  the  result  of  artifi- 
cially created  monopoly,  they  may  be  modified  directly 
by  social  action.  That  monopoly  has  played  a  part  in 
price  changes  goes  without  question,  though  as  to  the 
exact  part,  some  further  discussion  is  necessary. 

4.  THE  COSTS  OF  PRODUCTION 
Eevelations  regarding  excessive  monopoly  profits 
and  the  occasional  deliberate  wrecking  of  enterprises 
for  private  gain  have  placed  the  community  in  a  state 
of  mind  to  believe  that,  when  prices  rise,  some  one  is 
"  doing  it."  Such  an  idea  is  based  on  the  assumption 
that  the  producer  controls  the  conditions  of  produc- 
tion. No  assumption  could  be  more  fallacious. 

With  the  exception  of  a  few  well-favored  concerns 
which  own  all  of  the  productive  machinery  from  the 
mine  and  the  forest  to  the  steel  rail  or  the  reaper  and 
binder,  few  industrial  enterprises  are  in  a  position  to 
dominate  the  supply  and  the  cost  of  things  which  they 
use.  A  patent  monopoly,  or  some  other  form  of 
privilege,  may  arm  the  producer  with  the  power  to  fix 


THE  CAUSES  OF  ADVANCING  PEICES    121 

prices  (within  certain  limits).  The  prices  of  the 
raw  materials  entering  into  the  enterprises  are  wholly 
beyond  their  control. 

The  inability  of  certain  enterprises  to  control  the  cost 
of  production  is  well  illustrated  in  the  present  struggle 
between  the  railroads  and  their  employees.  Time  after 
time  the  employees  have  raised  the  issue  of  higher 
wages  ;  time  after  time  the  railroads,  fearing  the  force 
of  public  opinion,  have  submitted  the  matter  to  arbi- 
tration, rather  than  face  a  strike  ;  time  after  time  the 
decision  has  favored  wage  increase.  The  fairness  or 
unfairness  of  the  demands  and  the  awards  are  not  an 
issue.  The  fact  remains  that,  wholly  without  the  con- 
sent of  the  railroads,  production  costs  have  been  in- 
creased by  an  increase  in  the  rate  of  wages. 

The  cost  of  capital,  or  the  cost  of  raw  materials,  may 
be  similarly  increased  beyond  the  power  of  the  pro- 
ducer to  influence  the  change.  The  result  may  be  an 
increase  in  price,  which  is  due,  not  to  the  decision  of 
the  manufacturer  or  railroad  management,  but  to  cost 
increases  wholly  beyond  their  control. 

There  is  no  evidence  that  the  interest  rate  is  rising 
materially.  In  fact,  over  a  long  period,  it  has  de- 
creased. Nor  have  freight  rates  risen  in  such  a  man- 
ner as  to  materially  affect  the  average  producer.  On 
the  other  hand,  land  values,  the  prices  of  raw  mate- 
rials, and  the  cost  of  labor  have  apparently  advanced. 
If  this  proves  to  be  true,  the  producer  must,  for  self- 
protection,  increase  the  price  of  his  product. 

Another  element  lies  in  an  increase  in  production 
costs  which  is  outside  of  the  realm  of  any  single 
producer.  The  distance  between  the  producer  and 


122       EEDUCING  THE  COST  OF  LIVING 

the  consumer  has  been  steadily  increasing.  This  is 
true  both  as  to  distance,  time,  and  intricacy  of  trans- 
action. 

As  cities  grow,  as  products  are  carried  from  more 
and  more  distant  markets,  a  myriad  of  forces  inter- 
vene. Eaise  lettuce  in  your  kitchen  garden  and  you 
are  the  preparer  of  the  soil,  the  planter,  the  cultivator, 
the  harvester,  and  the  consumer.  Buy  lettuce  grown 
in  a  distant  truck  section,  and  all  of  the  multiple 
elements  of  present-day  economic  society  intervene 
between  producer  and  consumer.  The  railroads,  the 
middlemen,  the  banks  and  other  credit  institutions, 
the  retailer, — these  in  varied  number  and  character 
must  add  an  element  to  the  final  price.  Perhaps  they 
are  necessary  to  society  ;  perhaps  they  are  superfluous. 
In  any  case  they  must  be  reckoned  with. 

5.    A  LINE-UP  OF  FORCES 

One  of  the  easiest  things  in  public  discussion  is  to 
fasten  the  blame  for  this  or  that  economic  or  social 
disorder  upon  a  person  or  a  group  of  persons.  One 
of  the  hardest  things  is  to  find  any  basis  in  fact  for 
such  action.  Men  naturally  personify.  All  of  their 
intellectual  training  leads  them  in  that  direction. 
Men  seek  always  to  attach  personal  responsibility, 
and  hence  at  the  first  opportunity  they  point  their 
finger  at  this  individual  or  that  one.  Often  careful 
study  fails  to  show  the  faintest  trace  of  individual 
responsibility. 

There  are  economic  and  social  forces  always  in  oper- 
ation, which  are  beyond  the  control  of  any  individual. 
They  are  also  very  frequently  beyond  his  power  of 


THE  CAUSES  OF  ADVANCING  PEICES    123 

direction.  However  deplorable  the  effects  of  these 
forces,  personal  blame  for  their  existence  will  not  at- 
tach. The  increasing  interest  in  economic  and  social 
questions ;  the  wide-spread  recognition  of  the  complex 
interrelation  of  forces ;  and  the  general  acceptance  of 
the  doctrine  that  the  economic  and  social,  as  well  as 
the  biologic  world,  is  in  a  constant  process  of  a  change 
usually  called  "evolution,"  has  shed  a  very  different 
light  on  many  questions. 

A  discussion  of  the  cost  of  living  leads  directly  into 
some  of  the  most  fundamental  economic  and  social 
issues  of  the  age.  Above  all  else,  it  is  not  personal. 
To  the  last  degree  it  represents  a  process, — a  stage  in 
development, — that  must  win  the  attention  and  serious 
thought  of  society  if  its  solution  is  to  be  adequately 
effected.  Nor  is  the  matter  to  be  decided  by  fine-spun 
theories.  The  very  first  thing  to  ask  about  the  cost 
of  living  is, — "  What  are  the  facts  f  "  After  the  facts 
have  been  decided  there  may  still  be  room  for  the 
elaboration  of  theories,  but  until  all  available  sources 
of  fact  information  have  been  exhausted,  theories  must 
give  place. 


THE  FOOD  SUPPLY  AND  THE  INCREASING 
POPULATION 

1.     WILL  THE  FOOD  SUPPLY  KEEP  PACE  WITH 
THE  POPULATION? 

No  one  realizes  more  fully  than  the  student  of  eco- 
nomics the  speciousuess  of  the  cry,  "Not  enough  to 
go  around,"  yet  there  are  certain  fundamental  relations 
between  the  food  supply  and  population  which  the 
investigator  of  the  cost  of  living  can  hardly  ignore. 
On  the  one  hand,  population  constantly  increases ; 
on  the  other  hand,  the  sources  of  food  supply  are 
rather  definitely  limited. 

Man  is  the  only  animal  which  has  thus  far  been 
able  to  increase  irrespective  of  natural  limitations. 
All  other  species  are  restricted  by  natural  boundaries 
and  prevented  from  multiplying  by  the  limitation  of 
the  food  supply.  Man  alone  seems  to  be  exempt  from 
this  rule.  Arising  locally  he  is  now  diffused  over  the 
whole  surface  of  the  earth. 

Little  short  of  phenomenal  is  the  population  increase 
of  the  Western  World  during  the  nineteenth  century. 
The  number  of  people  in  Eussia  rose  from  thirty-eight 
millions  to  one  hundred  and  five  millions  ;  the  number 
in  France,  from  twenty-six  millions  to  thirty-eight 
millions ;  the  number  in  Germany,  from  twenty-three 


THE  FOOD  SUPPLY  126 

millions  to  fifty-five  millions;  the  number  in  Great 
Britain,  from  fifteen  millions  to  forty  millions;  and 
the  number  in  the  United  States,  from  five  millions  to 
seventy-five  millions.  Perhaps  never  before  in  the 
history  of  the  world  has  there  been  such  a  rapid  in- 
crease in  population  over  so  short  a  period  of  time. 

No  argument  is  necessary  to  demonstrate  the  limita- 
tions on  the  sources  of  food  supply.  The  number  of 
square  miles  of  fertile  land  has  been  measured,  and  for 
the  most  part  appropriated.  To  be  sure,  intensive 
cultivation  may  replace  the  present  desultory  agri- 
cultural system  so  prevalent  in  the  United  States. 
Nevertheless,  intensive  cultivation  involves  an  enor- 
mously large  outlay  of  labor  power.  Machinery  and 
large  scale  methods  dispense  with  this  labor  power,  to 
a  certain  extent,  while  they  decrease  the  food  yield 
per  acre  to  an  alarming  degree.  The  population  is 
increasing  rapidly.  There  are  definite  limitations  on 
food  supply.  The  increasing  population  means  an 
increasing  demand  for  food.  If  the  demand  increases 
while  the  supply  remains  stationary,  a  rise  in  the  price 
of  food  products  is  inevitable. 

2.    POPULATION  INCREASE  AND  THE  MEAT  SUPPLY 
IN  THE  UNITED  STATES 

During  the  latter  part  of  the  eighteenth  and  the 
early  part  of  the  nineteenth  century  the  population 
of  the  United  States  doubled  by  natural  increase  in 
a  little  less  than  twenty-five  years.  During  the  latter 
part  of  the  nineteenth  century,  however,  the  entire 
increase  due  to  birth  rate  and  immigration  combined 
has  not  been  nearly  so  great.  For  instance,  between 


126       BEDUCING  THE  COST  OF  LIVING 

1820  and  1850  the  population  increased  almost  two 
and  one-half  times  (from  nine  millions  to  twenty-three 
millions) ;  between  1840  and  1870  the  increase  was 
slightly  more  than  doubled  (from  seventeen  millions 
to  thirty-eight  millions)  ;  between  1860  and  1890  the 
population  doubled  exactly  (from,  thirty-one  millions 
to  sixty-two  millions)  j  and  between  1880  and  1910  the 
population  fell  considerably  short  of  doubling,  since  it 
was  fifty  millions  in  1880,  and  only  ninety-two  mil- 
lions in  1910.  There  is  still,  however,  an  increase  of 
population  in  the  United  States  equal  to  approxi- 
mately twenty  per  cent,  for  each  decade.  For  the 
purposes  of  this  discussion  it  will  be  sufficient  to  re- 
member that  from  1860  to  1910  the  population  of  the 
United  States  trebled,  increasing  from  thirty-one  mil- 
lions to  ninety-one  millions,  and  that  from  1880  to 
1910  it  just  failed  to  double.1 

Contrast  with  this  increase  in  population  the  increase 
in  the  production  of  certain  important  food  products. 
First  of  all  take  meat,  for  which  the  workingmau 
spends  one-third  of  his  food  budget.  The  meat  supply 
is  absolutely  limited  by  the  number  of  meat  animals  in 
a  community.  The  figures  showing  the  number  of  live 
meat  animals  in  the  United  States  show  an  alarming 
failure  to  keep  pace  with  the  increasing  population. 
Between  1860  and  1910  the  number  of  cattle  in  the 
United  States  doubled.2  In  1860  there  were  twenty - 
five  million  cattle,  and  in  1910  there  were  fifty-three 
million.  From  1880  to  1910,  there  was  an  increase  of 

1  See  Appendix  E. 

2  All  figures  in  this  chapter  relating  to  increase  in  production  are 
taken  from  the  United  States  Census  for  1910. 


THE  FOOD  SUPPLY  127 

thirty  per  cent,  in  the  number  of  cattle  in  the  United 
States.  The  increase  in  the  number  of  people  in  the 
United  States  is  therefore  much  more  rapid  than  the 
increase  in  the  potential  supply  of  beef.  Bearing  in 
mind  the  fact  that  dairying  has  increased  very  rapidly 
during  the  period  under  consideration,  it  becomes 
evident  that  beef  demand  has  increased  entirely  out  of 
proportion  to  the  beef  supply.  During  the  fifty  years 
from  1860  to  1910,  while  the  population  trebled,  the 
supply  of  cattle  merely  doubled.  Practically  the  same 
thing  is  true  of  sheep  and  swine,  the  two  other  prin- 
cipal sources  of  meat  supply.  There  were  twenty-two 
million  sheep  in  the  United  States  in  1860,  forty-two 
million  in  1830,  and  thirty-nine  million  in  1910.  The 
swine  in  1860  numbered  thirty-three  million  ;  in  1880, 
forty-nine  million ;  and  in  1910,  fifty-eight  million, 
showiug  a  slight  progressive  increase.  In  no  one  of 
these  cases,  however,  has  the  increase  in  the  number 
of  animals  corresponded  with  the  increase  in  the  pop- 
ulation. 

The  explanation  of  these  facts  is  simple.  First  of 
all,  the  grazing  lauds  in  the  West  and  South  are  being 
rapidly  converted  into  cotton  fields,  apple  orchards, 
and  wheat  farms.  At  one  time  these  lands,  situated 
far  from  railroads,  were  so  cheap  that  grazing  on  them 
was  profitable.  Kailroads  developed  the  territory ; 
the  price  of  the  land  rose  ;  the  landowners  discovered 
that  crops  were  paying  investments  ;  hence  ranches 
were  cut  up  into  farms,  and  grazing  disappeared. 

The  conversion  of  the  ranches  into  farms  increased 
laud  values  at  the  same  time  that  it  increased  the 
supply  of  cotton  and  grain.  It  made  serious  in- 


128       EEDUCING  THE  COST  OF  LIVING 

roads  on  the  source  of  supply  for  American  cheap 
meat. 

The  facts  regarding  meat  supply  are  therefore  patent. 
Unless  the  imports  of  meat  have  increased  with 
enormous  rapidity,  or  unless  the  demand  for  meat  has 
decreased  phenomenally,  there  would  naturally  be  a 
very  greatly  enhanced  price  attaching  to  meat  products. 
As  a  matter  of  fact,  there  has  been  no  increase  in 
imports  to  correspond  with  the  increasing  population, 
and  whatever  decrease  there  has  been  in  demand  has 
been  probably  forced  by  the  increased  price. 

3.  THE  SUPPLY  OF  DAIEY  AND  OTHER 
FOOD  PRODUCTS 

Turning  now  to  dairy  products,  it  appears  that  the 
production  of  butter  was  460  million  pounds  in  1860  ; 
808  million  pounds  in  1880  ;  and  1,491  million  pounds 
in  1899,  1,619,000,000  in  1909.  The  production  of 
cheese  increased  from  103  million  pounds  in  1860  to 
248  million  pounds  in  1880,  298  million  pounds  in  1899, 
317  million  pounds  in  1905,  and  321  million  pounds 
in  1909.  The  figures  covering  the  increase  in  milk  are 
most  unsatisfactory.  In  1890  the  production  was  five 
billion  gallons,  and  in  1899,  7,266  million,  and  in  1909, 
7,466  million  gallons.  At  the  same  time  the  increase 
in  the  number  of  milch  cows  has  been  very  slight — 
fourteen  millions  in  1887,  and  twenty  millions  in  1910. 
The  value,  however,  of  these  cows  has  increased 
enormously,  totalling  $378,000,000  in  1887,  and 
$750,000,000  in  1910. 

Egg  production  from  1880  to  1909  increased  from 
456  million  dozen  to  1,294  million  dozen  in  1899  and 


THE  FOOD  SUPPLY  129 

1,591  million  dozen  in  1909.  At  the  same  time,  the 
number  of  chickens  increased  from  102  millions  to  296 
millions. 

The  increase  in  the  production  of  cereal  crops  has 
greatly  exceeded  the  increase  in  the  production  of  meat 
and  dairy  products.  The  wheat  yield  of  the  United 
States  was  173  million  bushels  in  1860,  499  million 
bushels  in  1880,  and  635  million  bushels  in  1910. 
Corn,  too,  has  increased.  In  1860  the  yield  was  839 
million  bushels  ;  in  1880  this  yield  had  doubled  ;  and 
in  1910,  it  had  slightly  more  than  trebled.  The  corn 
crop  of  1880  was  seventeen  thousand  million  bushels, 
however,  and  that  of  1910  was  only  28,000  million 
bushels.  Though  the  crop  increased  three  times  from 
1860  to  1910,  it  failed  to  double  between  1880  and  1910. 

4.    THE  MEAT  FAMINE 

The  figures  thus  far  cited  give  an  excellent  idea  of 
the  increase  in  food  production  which  has  occurred 
during  the  half  century  between  1860  and  1910,  and 
during  the  three  decades  between  1880  and  1910. 
Most  discussions  of  the  increased  cost  of  living  refer, 
however,  to  the  twenty  years  beginning  with  1890.  It 
is  during  that  period  that  most  of  the  price  records 
have  been  kept.  Unfortunately,  the  Census  statistics 
of  1890  have  been  open  to  serious  question.  Neverthe- 
less, it  will  be  of  interest  to  consider  briefly  the  changes 
in  potential  food  supply  between  1890  and  1910.  Dur- 
ing these  twenty  years  the  population  grew  from  sixty- 
two  to  ninety-one  millions  (approximately  fifty  per 
cent.).  During  the  same  period,  the  number  of  cattle 
in  the  United  States  decreased  from  fifty-seven  to  fifty-. 


130       KEDUCING  THE  COST  OF  LIVING 

three  millions  ;  the  number  of  sheep  decreased  from 
forty  to  thirty-nine  millions ;  aiid  the  number  of  swine 
increased  from  fifty-seven  to  fifty-eight  millions.  In 
other  words,  during  the  two  decades  beginning  with 
1890,  when  so  great  an  increase  in  prices  occurred,  the 
number  of  meat  animals  has  decreased  or  remained 
practically  stationary,  although  the  population  in- 
creased during  the  same  time  about  fifty  per  cent. 

Even  more  striking  are  the  figures  for  a  short  term 
of  years  published  by  the  United  States  Department  of 
Agriculture  (June  2,  1913)  in  a  special  statement. 
"The  shortage  in  the  supply  of  meat-producing 
animals  in  the  United  States  is  steadily  becoming 
more  pronounced,  and  it  is  evident  that  the  country  is 
facing  an  era  of  short  production  of  meat.  In  the 
last  six  years  there  has  been  a  decline  of  over  thirty 
per  cent,  in  the  number  of  beef  cattle  in  the  country, 
while  the  population  and  the  consequent  demand  for 
meat  have  increased.  According  to  estimates  of  the 
Department  of  Agriculture,  the  beef  cattle  in  the 
country  on  January  1,  1907,  numbered  51,566,000, 
and  at  the  beginning  of  the  present  year  the  number 
was  only  36, 030, 000. ' '  The  statement  then  calls  atten- 
tion to  the  fact  that  imports  of  animal  products  now 
exceed  exports  in  value,  that  the  Australian  supply  is 
primarily  of  beef  and  mutton,  and  that  the  number  of 
cattle  in  Argentine  actually  decreased  between  1908 
and  1911.  "What  wonder,"  the  Department  com- 
ments, "that  the  prices  of  meat  have  risen  at  a 
phenomenal  rate  ?  " 

While  there  has  been  so  marked  a  decrease  in  the 
meat  supply  during  the  past  few  years,  the  same  thing 


THE  FOOD  SUPPLY  131 

is  riot  true  of  cereal  crops,  which  in  several  cases  show 
a  smaller  yield  in  1890  than  in  1880,  and  therefore  a 
considerably  greater  increase  between  1890  and  1910 
than  between  1880  and  1910.  The  corn  yield,  for  in- 
stance, doubled  between  1890  and  1910  ;  the  wheat 
yield  increased  from  399  millions  to  635  millions  (about 
thirty  per  cent.)  ;  the  oat  crop  doubled  ;  the  rye  crop 
increased  from  twenty-five  to  thirty-four  millions ;  the 
barley  crop  from  67  to  173  millions  ;  the  buckwheat 
crop  from  twelve  to  seventeen  millions  ;  and  the  rice 
crop  from  136  to  680  million  pounds. 

Only  the  most  general  figures  have  been  cited  in  this 
statement,  partly  because  more  detailed  figures  throw 
no  additional  light  on  the  situation,  and  partly  because 
of  the  rather  unsatisfactory  character  of  the  figures 
which  are  available.  It  should  also  be  remembered 
that  these  statistics  cover  but  a  small  proportion  of  the 
total  consumption  of  an  ordinary  family.  Neverthe- 
less, in  so  far  as  they  go,  they  indicate  beyond  any 
reasonable  possibility  of  controversy,  that  during  the 
half  century  between  1860  and  1910,  the  population  of 
the  United  States  increased  at  a  considerably  higher 
rate  than  the  number  of  animals  available  for  slaughter. 
The  same  statement  holds  true  of  the  thirty  years 
elapsing  between  1880  and  1910.  At  the  same  time 
cotton,  wool,  cereals,  and  dairy  products  have  in  few 
cases  increased  more  rapidly  than  the  population,  and 
have  in  some  cases  increased  at  a  much  slower  rate  than 
the  population. 

5.    Is  WOELD  STARVATION  IMPENDING  ! 
More  than  a  hundred  years  ago,  Thomas  Malthus, 


132      BKDUCING  THE  COST  OF  LIVING 

confronted  by  a  somewhat  similar  situation,  uttered  his 
prediction  of  world  famine.1  Since  that  time  the  use 
of  new  food  areas  (North  and  South  America,  South 
Africa,  and  Australia)  has  greatly  increased  the  pos- 
sible and  the  actual  food  supply.  The  time  has  come, 
however,  when  the  last  food  areas  have  been  discovered, 
and  when,  therefore,  the  food  possibilities  are  rather 
definitely  known. 

Malthus  was  wrong  in  predicting  immediate  world 
disaster  from  overcrowding,  although  evidently  he  was 
right  in  predicting  the  encroachments  of  population  on 
the  food  supply.  In  his  time  the  absence  of  rail  and 
ocean  steam  transportation,  as  well  as  the  embryonic 
state  of  the  factory  system,  made  it  impossible  for  him 
to  see  nineteenth  century  developments.  Could  he 
have  witnessed  the  opening  of  the  vast  wheat  regions 
in  South  America,  the  Mississippi  Valley,  and  South 
Africa,  had  it  been  possible  for  him  to  imagine  the 
enormous  accretions  of  social  efficiency  which  would 
come  with  the  perfection  of  the  factory  system  of  in- 
dustry based  upon  modern  transportation  devices,  he 
must  have  revised  his  judgment  regarding  immediate 
calamity.2  Again,  Malthus  had  no  means  of  foreseeing 

1  "An  Essay  on  the  Principles  of   Population,"   Rev.  T.  R. 
Malthus,  2d  Edition,  Vol.  I,  pp.  3-15. 

2  The  per  acre  yields  in  the  United  States  have  lagged  woefully 
behind  Malthus's  predicted  arithmetic  ratio.     Corn,  for  example, 
showed  a  per  acre  yield  of  twenty-five  bushels  in  1880,  and  twenty, 
seven  bushels  in  1910.     During  the  same  period  the  per  acre  yields 
of  wheat  were  twelve  and  thirteen  bushels  ;  of  oats,  twenty -seven 
and  thirty-one  bushels  ;  of  barley,  twenty-two  bushels  each  year  ; 
of  rye,  thirteen  and  sixteen  bushels  ;  and  of  buckwheat,  fourteen 
and  twenty  bushels.     During  the  thirty  years,  therefore,  which 


THE  FOOD  SUPPLY  133 

the  phenomenal  decrease  in  the  birth  rate  which  has 
occurred  since  1800.  Franklin  described  the  average 
family  of  his  time  as  a  family  containing  eight  chil- 
dren. Since  then  there  has  been  a  regular  decrease  in 
the  birth  rate,  until  the  average  family  of  the  present 
contains  not  more  than  four  children.  Among  the 
graduates  of  American  colleges,  and  among  the  native- 
born  population  of  New  England,  families  number 
little  more  than  two  children.  Writing  at  the  end  of 
an  old  epoch,  Malthus's  prophetic  vision  was  neces- 
sarily limited. 

Though  Malthus's  predictions  were  wrong,  his  ulti- 
mate philosophy  was  right.  If  population  increase  is 
more  rapid  than  the  increase  in  the  food  supply,  the 
time  must  eventually  come  when  starvation  for  some  is 
inevitable ;  nor  are  indications  lacking  that  in  certain 
directions  that  time  has  already  arrived.  No  one  can 
read  without  real  concern  the  aggregation  of  facts 
which  Major  Woodruff  presents  in  his  recent  book  on 
"  The  Expansion  of  Races."  l 

Major  Woodruff  first  discusses  "  saturation, "  showing 
how  the  possible  density  of  population  is  affected  by 
rainfall,  soil  fertility,  climate,  and  the  advance  of  civ- 
ilization. He  then  cites  in  considerable  detail  the  evi- 
dences which  America  affords  of  super-saturation  in 

have  elapsed  between  1880  and  1910,  which  were  theoretically,  at 
least,  the  years  daring  which  scientific  agriculture  has  had  the 
most  wide-spread  vogue,  the  increase  in  the  yield  per  acre  of  the 
principal  cereal  crops  has  been  in  the  neighborhood  of  ten  per  cent. 
(The  increase  in  the  yields  of  rye  and  buckwheat  are  somewhat  in 
excess  of  this  figure. ) 

1  "  Expansion  of  Races,"  Charles  Edward  Woodruff,  New  York, 
Rebman  Company,  1909. 


134       REDUCING  THE  COST  OF  LIVING 

industrial  districts.  Low  wages,  insufficient  housing, 
poverty,  unemployment,  the  under-feeding  of  school 
children,  and  a  host  of  other  facts,  supply  him  with 
ample  material  for  his  conclusion  that  there  are  alarm- 
ing indications  on  all  hands  of  the  uuder-nutrition  of  a 
considerable  portion  of  the  population. 

This  under- nutrition,  Major  Woodruff  hastens  to  as- 
sure us,  is  not  due  to  an  under  supply  of  food,  but  to 
an  under  supply  of  nitrogen,  the  basis  of  life.  He  fol- 
lows up  the  effects  of  the  deficiency  of  the  nitrogen  diet 
in  a  very  effective  chapter,  "  Nitrogen  Starvation,  or 
the  Modern  Famine,"  in  which  he  attempts  to  show 
that  the  poor  are  starving  to  death  none  the  less  effect- 
ively, even  though  the  immediate  cause  of  death  is 
stated  as  something  other  than  the  logical  outcome  of 
malnutrition. 

Publicists  and  economists  who  have  gone  with  end- 
less detail  into  the  causes  of  the  increased  cost  of  liv- 
ing, and  particularly  of  the  increased  cost  of  meat, 
might  save  themselves  many  a  theory  and  many  an 
epigram,  if  they  would  bear  in  mind  the  patent  fact 
that  during  the  past  twenty  years,  while  meat  prices 
have  risen  from  sixty  to  one  hundred  per  cent.,  there 
has  been  an  increase  of  approximately  fifty  per  cent,  in 
population,  with  virtually  no  increase  in  the  number  of 
meat  animals. 

The  same  facts  which  lead  to  an  increase  in  the  cost 
of  meat  explain  the  considerable  rise  in  the  price  of 
butter,  milk,  and  cheese.  The  number  of  milch  cattle 
has  not  increased  as  fast  as  the  population,  nor  is  this 
discrepancy  offset  by  the  increase  in  the  milk  supply 
per  cow. 


THE  FOOD  SUPPLY  135 

An  analysis  of  the  agricultural  statistics  of  the 
United  States  would  lead  an  observer,  inevitably,  to 
the  conclusion  that  since  the  most  marked  failure  of 
supply  to  keep  pace  with  demand  showed  itself  in  the 
case  of  meat  animals,  the  most  extreme  price  increases 
would  be  recorded  in  the  case  of  meats  and  meat  prod- 
ucts. Such  is  indeed  the  case. 

No  clear  case  can  be  made  in  the  instances  of  other 
food  products.  It  is  not  at  all  evident  that  the  food 
supply  is  failing  to  keep  pace  with  the  population. 
For  certain  products  the  increase  is  more  rapid  than 
the  demand  for  food  ;  for  other  products  it  is  less  rapid. 
The  rate  of  change  at  different  decades  is  also  unequal. 
It  is- nevertheless  true  that  the  food  supply  has  not  in- 
creased faster  thau  the  population. 

The  student  who  is  seeking  to  explain  the  increasing 
cost  of  living  need  search  no  farther  than  the  failure 
of  certain  forms  of  food  supply  to  keep  pace  with  the 
population,  for  one  important  factor  in  the  situation. 
That  it  is  the  only  factor  no  one  can  contend.  That  it 
is  of  immense  significance  in  certain  instances,  such  as 
the  increase  in  the  price  of  meat,  seems  equally  ap- 
parent. 


XI 
THE  INCREASING  GOLD  SUPPLY 

1.    THE   INCREASING  GOLD  SUPPLY  AN  ECONOMIC 
FORCE 

THE  changing  agriculture  of  the  United  States,  with 
its  disturbing  effects  on  the  food  supply,  is  an  eco- 
nomic force  of  the  first  magnitude.  It  has  a  parallel, 
perhaps  an  equal,  in  the  increasing  gold  supply. 

None  of  the  causes  of  the  increasing  cost  of  living 
has  ever  been  accorded  such  general  popular  attention 
as  has  the  increase  in  the  gold  supply.  Malthus  wrote 
of  the  relation  between  population  and  food.  Henry 
George  discussed  land  values.  Here  and  there  may 
be  found  fragmentary  comments  upon  the  increase  in 
labor  costs,  the  predatory  activity  of  the  trusts,  and 
the  changing  character  of  occupations.  More  than  all 
of  these  comments  together,  however,  in  the  field  of 
economic  literature,  have  been  the  wide-spread  analyses 
and  discussions  of  the  gold  supply  as  a  source  of  price 
change. 

There  must  be  a  common  denominator  in  terms  of 
which  the  worth  of  all  goods  can  be  expressed  ;  other- 
wise it  would  be  impossible  to  carry  on  the  business  of 
exchanging  commodities  except  by  the  very  primitive 
means  of  bartering  one  commodity  for  another.  A  ton 
of  straw  would  be  given  for  two  pairs  of  shoes  ;  a  bicy- 
cle would  barter  for  a  Morris  chair.  Each  thing  would 
have  a  value  only  in  case  it  was  wanted  by  some  one 


THE  INCREASING  GOLD  SUPPLY        137 

who  was  willing  to  give  another  thing  in  exchange  for 
it.  The  need  of  a  standard  of  value  is  apparent. 
Among  most  civilized  people  gold  has  been  decided 
upon  as  the  commodity  in  terms  of  which  the  value  of 
all  other  commodities  shall  be  stated.  Men  therefore 
say  that  they  will  exchange  a  pair  of  shoes  or  a  bicycle 
for  so  much  gold.  Gold  is  the  yardstick  of  commerce. 

In  order  that  exchange  by  gold  may  be  simplified, 
definite  units  of  gold  have  been  fixed.  For  instance 
the  government  of  the  United  States  has  determined 
that  25. 9  grains  of  gold,  nine-tenths  fine,  shall  be  a  dol- 
lar. An  improved  device  for  extracting  gold  from  ore 
might  double  the  supply  over  night,  but  25.9  grains 
of  gold  would  still  be  a  dollar. 

Gold  is  a  commodity  in  the  sense  that  corn  and  hard 
coal  are  commodities.  It  is  derived  from  nature 
through  the  use  of  labor  and  capital ;  it  is  bought  and 
sold  in  the  open  market ;  it  may  be  exchanged  whether 
in  the  form  of  bullion  or  currency  for  other  commodi- 
ties. Under  the  old  barter  economy  it  actually  was 
exchanged  in  nuggets  or  dust  for  food,  clothing,  houses, 
and  lands. 

2.    SUPPLY  AND  DEMAND 

One  of  the  rules  of  economics  seems  to  be  that  an 
increase  in  the  supply  of  one  commodity,  other  things 
being  equal,  will  result  in  lowering  its  value.  For 
example,  if  a  shoemaker  is  making  one  pair  of  shoes 
in  the  course  of  a  day's  work,  and  a  farmer  is  raising 
five  bushels  of  wheat  by  a  day's  work,  the  shoes  and 
the  wheat  will,  roughly  speaking,  exchange  for  one 
another.  Suppose,  however,  that  through  the  use  of 
a  different  kind  of  seed,  no  more  expensive  than  the 


138       KEDTJCING  THE  COST  OF  LIVING 

variety  formerly  used,  the  farmer  is  able  to  get  ten 
bushels  of  wheat  for  a  day's  labor,  while  the  shoe- 
maker still  produces  one  pair  of  shoes ;  then,  presum- 
ably, the  shoemaker  will  insist  upon  getting  ten  bushels 
of  wheat  for  each  pair  of  shoes.  Though  this  illustra- 
tion is  in  one  sense  fallacious,  since  value  in  exchange 
is  not  based  wholly  upon  labor  value,  it  nevertheless 
represents  the  general  law  of  exchange,  that  an  increase 
in  the  number  of  units  of  a  commodity  tends  to  lower 
the  exchange  value  of  each  unit. 

Since  gold  is  a  commodity,  the  theory  which  applies 
to  other  commodities  should  apply  also  to  gold.  Gold 
is  the  basis  of  the  modern  currency  system.  When 
any  one  says  "  A  bushel  of  wheat  is  worth  a  dollar," 
he  means,  "A  bushel  of  wheat  will  exchange  for  25.9 
grains  of  gold. "  As  the  amount  of  gold  increases,  the 
value  of  it  in  terms  of  other  commodities  will  decrease, 
that  is,  expressed  in  terms  of  gold,  prices  will  rise. 

3.    MONEY  AND  PRICES 

Gold  is  only  one  form  of  money,  though  it  is  the 
basis  of  value.  Silver  and  paper  money  are  issued. 
By  such  means,  the  actual  amount  of  money  (currency 
plus  credit  money)  circulated  is  vastly  augmented. 
Professor  Kem merer,  one  of  the  most  prominent 
champions  of  the  quantity  theory  of  money,  writes, — 
"In  spite  of  all  the  complexities  of  our  modern  in- 
dustrial regime,  general  prices,  other  things  equal, 
vary  proportionately  and  in  the  same  direction  with 
variations  in  the  money  supply."  l 

1  "  The  Gold  Supply  and  Prosperity,"  Byron  W.  Holt,  Editor, 
The  Moody  Corporation,  New  York,  1907,  p.  51. 


THE  INCREASING  GOLD  SUPPLY        139 

Much  modern  business  is  done  without  the  use  of 
any  gold,  by  means  of  checks  and  drafts,  which  are 
based  on  deposits  of  gold,  and  which  are  expressed  in 
terms  of  gold.  In  practice,  the  number  of  dollars  of 
credit  transactions  each  year  are  many  times  greater 
than  the  number  of  dollars  of  gold  transactions.1 
Professor  Fisher  therefore  changes  Professor  Kem- 
merer's  statement  somewhat,  writing  that  "  the  price 
level  in  any  community  is  proportional  to  the  volume 
of  the  circulating  medium,  provided  the  velocity  of 
circulation  and  the  volume  of  business  transactions 
remain  constant."2  Though  Professor  Fisher's  state- 
ment alters  the  view-point  slightly,  it  does  not  affect 
the  reasoning.  In  both  statements  the  same  thought 
remains  dominant, — an  increase  in  the  supply  of  a 
commodity,  in  this  case  money,  decreases  its  pur- 
chasing power.3 

So  long  as  the  amount  of  the  circulating  medium 
continues  to  increase,  and  Professor  Fisher  has  shown 
pretty  conclusively  that  it  has  been  enormously  in- 
creased in  recent  years  by  the  increase  in  the  supply 
of  gold  and  in  the  use  of  credit  instruments,4  the  world 

1  For  the  year  of  1912  the  total  gold  money  in  circulation  was 
$610,724,154;  silver  and  notes,  $2,673,788,940;  bank  clearings, 
$168,506,362,000.  Bank  clearings  are  the  credit  transactions  which 
pass  through  the  clearing  house.  All  credit  transactions  are  not  so 
recorded.  The  six  hundred  millions  of  gold  money  may  have 
passed  through  several  hands  during  the  year,  but  at  best,  it  is  a 
mere  bagatelle  when  compared  with  the  total  credit  transactions. 

*  "  The  Gold  Supply,"  Op.  Cit.,  p.  35. 

3  An  interesting  statement  of  Professor  Fisher's  analysis  of  this 
problem  will  be  found  in  the  American  Enonomic  Review,  June, 
1912.  *  See  Appendix  H. 


140       EEDUCING  THE  COST  OF  LIVING 

may  look  forward  to  a  continual  increase  in  prices. 
Mr.  Holt  states  the  matter  most  concretely  in  this 
way  :  "  During  the  last  decade  prices  have  risen  about 
fifty  per  cent.  .  .  .  During  this  decade  the  world's 
stock  of  gold  has  increased  fifty  per  cent.  But  in  this 
decade  many  important  countries  have  adopted  gold 
as  their  standard  of  value,  thus  creating  a  demand  for 
much  of  this  surplus  gold.  Suppose,  as  is  probable, 
that  the  world's  gold  supply  should  increase  fifty  or 
one  hundred  per  cent,  during  the  next  decade,  and 
suppose,  as  is  also  probable,  that  no  important  country 
should,  in  that  time,  change  from  a  silver,  copper  or 
paper  to  a  gold  standard  ;  is  it  not  possible  and  even 
probable,  that  prices  would  advance  even  more  rap- 
idly than  during  the  last  decade  ?  Suppose  that,  as 
some  expect,  prices  should  advance  at  an  average  rate 
of  ten  per  cent,  a  year  and  that,  in  1917,  they  should 
be  200  per  cent,  higher  than  now.  Think  what  a  rev- 
olution would  have  taken  place  in  values."  l 

Mr.  Holt  here  states,  baldly,  what  the  leading  ex- 
ponents of  the  quantity  theory  of  money  assert  more 
guardedly.  Professor  Fisher  insists  that  the  quantity 
theory  is  true  "in  the  sense  that  one  of  the  normal 
effects  of  an  increase  in  the  quantity  of  money  is  an 
exactly  proportional  increase  in  the  general  level  of 
prices."  2  On  the  preceding  page  he  states  that  as  a 
result  of  "  a  doubling  in  the  quantity  of  money,"  "it 
follows  necessarily  and  mathematically  that  prices 
must  double."  The  following  page  carries  an  impor- 

1  "  The  Gold  Supply,"  Op.  Cit.,  pp.  xi. 

2  "  The  Purchasing  Power  of  Money,"  Irving  Fisher,  New  York, 
The  Macmillan  Company,  1911,  p.  157. 


THE  INCREASING  GOLD  SUPPLY        141 

taut  qualification  to  the  effect  that  "  other  causes ' '  may 
offset  the  operation  of  the  quantity  theory.  Through- 
out this  discussion,  however,  Professor  Fisher  lays  far 
more  emphasis  upon  the  rule  than  on  the  exception. 

4.    DOES  GOLD  MAKE  PRICES? 

There  can  be  little  question  that  an  increase  in  the 
supply  of  the  commodity  which  is  used  as  the  basis  of 
exchange  value  will  increase  the  value  of  the  other 
commodities  for  which  this  medium  of  exchange  is 
given.  Yet  few,  even  of  the  most  ardent  advocates  of 
the  quantity  theory  of  money,  would  go  so  far  as  to  de- 
clare that  "I  believe  that  the  two  great  causes  (for  the 
recent  price  increases),  about  equally  important,  are  : 
1.  The  great  increase  in  the  production  of  gold, 
and  consequently  the  expansion  in  the  world's  cur- 
rencies ;  and  2.  The  increase  in  the  use  of  checks, 
which  are  used  as  a  substitute  for  money  and  therefore 
tend  to  have  the  same  inflational  result.  In  other 
words,  I  think  '  inflation '  may  be  used  as  the  one 
word  to  sum  up  my  explanation  for  the  rise  of  prices 
during  the  last  fifteen  years — inflation  of  money  and 
inflation  of  credit. "  l 

Professor  Fisher,  in  applying  his  theory,  makes  a 
strong  appeal  to  the  holders  of  contract  securities." 
"  Let  us  illustrate.  Take  the  savings  bank  depositor, 
say  a  servant  girl  who  put  one  hundred  dollars  ($100) 
into  a  savings  bank  fifteen  years  ago  and  now  takes  it 
out.  It  has  grown  to  one  hundred  and  fifty  dollars 

1  An   Address  before  the  City  Clnb  of  Philadelphia,   by  Prof. 
Irving  Fisher,  City  Club  Bulletin,  Vol.  VI,  p.  265  (Feb.  17, 1913). 
*&id.t  p.  266. 


142      EEDUCING  THE  COST  OF  LIVING 

($150)  by  the  accumulation  at  compound  interest  at 
four  per  cent,  during  the  last  fifteen  years,  and  she 
says,  "  Oh,  I  have  fifty  per  cent,  more  than  I  put  in." 
But  when  she  takes  it  away  and  tries  to  spend  it,  she 
finds  she  has  not  so  much  as  she  put  in.  Now,  what 
does  that  mean,  ladies  and  gentlemen?  It  means 
that  she  has  been  swindled  out  of  all  her  interest  by 
the  depreciation  of  the  dollar.  In  exactly  the  same 
way  the  bondholder  has  lost  all  his  interest,  only  he 
doesn't  know  it.  The  reason  that  he  doesn't  know  it 
is  because  he  has  been  spending  what  he  has  called  his 
income  every  year,  but  which  really  was  depreciation 
in  his  principal.  He  really  has  been  using  up  his 
principal,  and  he  will  find  it  out  when  he  tries  to 
spend  his  principal."  Whatever  the  value  of  Pro- 
fessor Fisher's  theoretical  contention,  at  this  point  its 
practical  aspects  are  open  to  a  serious  question,  which 
was  raised  at  this  same  meeting.  "This  general  rise 
in  prices  does  mean  loss  to  the  unfortunate  owners  of 
money,  of  gold  mines  and  of  gold  bullion,  and  to  the 
equally  unfortunate  holders  of  bonds,  mortgages  and 
promissory  notes,  these  being  payable  in  depreciating 
gold,  but  these  aside  why  should  the  rest  of  us  be 
seriously  concerned  ?  Why  in  particular  should  the 
poor  man,  the  wage-worker,  be  especially  interested  ? 
He  has  no  surplus  of  depreciating  dollars,  he  is  not 
burdened  with  bonds  and  mortgages  that  are  gradually 
shrinking  in  terms  of  wheat  and  cloth,  possibly  he  has 
not  even  a  savings  account  which  will  be  worth  no 
more  in  fifteen  years  than  it  is  to-day.  Why  is  he 
any  worse  off  however  much  gold  may  go  up  or  go 
down  t  This  man  surely  should  be  in  luck,  but  is  he  ? 


THE  INCREASING  GOLD  SUPPLY        143 

This  is  the  real  problem  we  are  up  against,  arid  about 
which  even  Professor  Fisher  had  nothing  to  say !  The 
fact  is,  as  we  all  know,  that  the  high  cost  of  living 
bears  hard  on  those  of  moderate  means,  it  bears  hard- 
est on  the  poor  man  and  is  least  burdensome  to  the 
creditor  class,  the  bondholders  and  mortgagees  who, 
by  our  theory,  should  be  bearing  the  whole  burden."  l 

Mr.  Smith's  delicate  reference  to  "the  unfortunate 
owners  of  money,  of  gold  mines,  of  gold  bullion," 
seems  justified  in  view  of  the  application  which  Pro- 
fessor Fisher  makes  of  his  theory.  As  Mr.  Smith  sug- 
gests, no  one  is  particularly  sorry  for  bullion  owners. 
When  all  is  said  in  this  direction,  it  still  remains  true 
that  theories  may  come  and  theories  may  go.  The 
quantity  theory  may  be  proved  or  disapproved  to  the 
end  of  time.  Meanwhile  the  property  holding  class 
prospers  as  it  never  prospered  before,  while  the  rising 
prices  of  food  bear  fiercely  upon  the  vast  majority 'of 
the  industrial  population. 

The  controversy  over  the  quantitative  theory  of 
money  is  endless,  with  the  weight  of  authority  inclin- 
ing toward  the  belief  that  money  is  a  commodity  ;  and 
that  an  increase  in  the  supply  of  money  will  depreciate 
its  value,  and  therefore  increase  the  prices  of  other 
things  when  measured  in  money  terms. 

5.    GOLD  PRODUCTION 

While  those  who  are  interested  in  the  quantity 
theory  of  money  pursue  the  argument,  the  serious  stu- 

1  An  Address  before  the  City  Club  of  Philadelphia,  by  Prof. 
Irving  Fisher.  City  Club  Bulletin,  Vol.  VI,  pp.  294-295.  Letter 
from  Mr.  Marshall  E.  Smith. 


dent  of  the  problem  must  turn  to  the  facts.  Prices 
have  increased ;  the  amount  of  gold  has  increased.  Is 
there  a  traceable  relation  between  the  phenomena  f 

The  supply  of  gold  has  increased  rapidly  in  recent 
years.  In  1860  the  amount  of  gold  produced  in  the 
world  each -year  was  in  the  neighborhood  of  six  mil- 
lion ounces,  fine.  This  annual  production  was  main- 
tained with  comparatively  little  variation  until  the 
wide-spread  exploitation  of  the  gold  fields  in  Australia, 
South  Africa  and  Alaska.  These  three  sources  of 
supply,  combined  with  the  older  fields,  caused  a  rapid 
increase  in  the  total  amount  produced.  In  1891,  the 
annual  production  was  six  million  ounces ;  in  1894, 
eight  million  ;  in  1897,  eleven  million  ;  in  1900,  twelve 
million  ;  in  1903,  fifteen  million  ;  in  1906,  nineteen 
million ;  and  in  1910,  just  short  of  twenty-two  mil- 
lions. The  two  decades  from  1890  to  1910  have,  there- 
fore, witnessed  an  increase  of  approximately  260  per 
cent,  in  the  annual  production  of  gold.1 

The  rapid  production  of  gold  has  greatly  increased 
the  total  amount  of  gold  in  the  community.  The  exact 
amount  of  this  increase  it  is  impossible  to  state,  though 
some  idea  of  it  may  be  obtained  from  a  comparison  of 
the  total  amount  of  gold  in  the  public  institutions  with 
the  amount  of  increase  minus  the  amount  used  in  the 
arts.  The  estimate  is  made  that  in  1910  there  were 
in  the  banks,  public  treasuries  and  in  circulation,  in 
the  principal  countries  of  the  world,  $6,704,100,000  in 
gold.  The  figures  for  1910  showed, — 

1  Statistical  Abstract  of  the  United  States  for  1912,  Washing- 
ton, Government  Printing  Office,  1913,  p.  797;  also  see  Appen- 
dix I. 


THE  INCBEASING  GOLD  SUPPLY        145 

World's  gold  production $454,703,900 

Consumed  in  arts  and  industries    .    .    .      176,608,200 


Net  increase  in  gold $278,095,700 

If  these  figures  are  approximately  correct,  the  amount 
of  gold  in  the  financial  world  was  increased  in  1910 
by  278  millions  of  dollars,  or  about  four  per  cent.1 

6.    OFFSETS  TO  THE  INCREASING  GOLD  SUPPLY 
Against  this  large  increase  in  the  gold  supply  there 
are  a  number  of  significant  offsets.    There  is  more  gold 
in  the  country  but  there  are  also  more  demands  for  the 
use  of  gold  created  by, — 

1.  Increase  in  the  population.2 

2.  Increase  iu  the  volume  of  business. 

3.  Increase  in  the  production  of  other  commodities. 

Furthermore,  the  total  amount  of  gold  in  the  world  is 
not  a  fair  test  of  its  commercial  significance,  since, 
during  the  past  twenty  years,  a  number  of  countries 
have  adopted  gold  as  the  circulating  medium,  thus  in- 
creasing the  demand  for  gold.  Then,  too,  there  has 
been  a  considerable  increase  in  the  use  of  gold  in  the 
arts.  All  of  these  factors  tend  to  negative  the  effects 
of  an  increase  in  the  supply  of  gold. 

There  is  more  demand  for  gold  to-day  than  there  was 
twenty  years  ago.  The  population  has  increased  ; 
but,  chiefly,  the  volume  of  exchange  (transactions 
involving  the  use  of  money  or  credit)  has  immensely 
increased.  That  is,  the  potential  demand  for  gold  is 
much  greater.  Unless  there  is  some  increase  in  supply 

1  See  Statistical  Abstract  of  the  United  States,  1911,  Washington, 
Government  Printing  Office,  1912,  pp.  756-759. 

2  See  Appendix  G. 


146       REDUCING  THE  COST  OF  LIVING 

to  offset  this  increase  in  demand,  prices  would  natu- 
rally fall.  Most  important  of  all,  however,  the  pro- 
duction of  other  commodities  has  increased.  There 
are  more  houses  in  the  community,  more  steel  rails, 
more  machinery.1 


1  Some  significant  estimates  showing  the  increase  in  the  production  of  commodities 
other  than  gold  are  given  in  the  "  Statistical  Abstract  "  (1912,  p.  810). 

WORLD'S  DEVELOPMENT,  1850  TO  1910 

(suotjjijy) 

P1°O 
fo  fy4<}ns  jv} 

•U  stP!MAl 

n<  in  r-  oo  •*  r~  in 

The  population  has  increased  fifty  per  cent.  ;  tonnage  of  steam  vessels  has  increased 
nearly  thirty  times  ;  miles  of  railway  twenty  times  ;  cotton  nearly  seven  times  ;  coal 
fifteen  times  ;  pig  iron  fifteen  times  ;  gold  production  ten  times,  and  the  total  supply  of 
gold  four  times.  Some  of  these  figures,  particularly  those  for  visible  supply  of  gold,  are 
little  better  than  guesses.  They  are  suggestive  rather  than  statistical. 

(Columns  one  to  six,  "Statistical  Abstract,"  1912,  p.  810;  columns  seven  and  eight, 
"The  Gold  Supply,"  Op.  Cit.,  pp.  76-79.) 

CD  m  r-  o  QO  co  •**" 

O  CO  <M  O  t^  O  O 
CO  <N  00  CO  t-  OJ  I- 

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O1*  05  03  O  O  O 

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fo  iSvuuo^ 

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CO  i-l  "9«  00  O5  IO  CO 
OO  t~  O  00  W  OC  O3 

T-I  oo  in  oo  co  eo 

i-l  O» 

(suovjiffl) 
uoijvjntfoj 

in  in  o  os  oc  n  CD 

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k 

1 

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00  00  CD  OO  00  O5  O5 
1-1  TH  r-t  lH  l-t  TH  rH 

THE  INCBEASING  GOLD  SUPPLY        147 

The  number  of  tons  of  coal,  board  feet  of  lumber, 
bushels  of  corn,  and  yards  of  cotton  cloth  produced 
each  year  has  greatly  increased.  If  gold  is  a  commod- 
ity, set  off  in  exchange  against  other  commodities, 
it  would  have  lost  in  value  if  the  supply  had  remained 
stationary,  because  of  the  immense  increase  in  the 
production  of  those  things  for  which  gold  is  exchanged. 
J.  A.  Hobson  concludes  a  careful  investigation  of  this 
proposition  with  the  statement, — "  It  is  clear  that  the 
increased  output  of  gold  within  the  last  fifteen  years, 
though  adding  very  largely  to  the  aggregate  amount  of 
gold  available  for  purchasing  power,  must  have 
exerted  a  comparatively  trivial  direct  effect  in  raising 
prices.  Whatever  this  direct  effect  may  be,  it  cannot 
account  for  more  than  a  small  fraction  of  the  actual  rise 
in  prices  that  has  taken  place."  * 

Another  element  enters.  Credit  money  has  in- 
creased in  amount.2  Is  credit  money  to  be  placed  on  a 
parity  with  gold  as  a  commodity  ?  It  certainly  is  not 
a  commodity.  Shall  it  be  so  considered  ? 

While  more  difficult  to  measure,  the  increase  in  the 
amount  of  credit  money  has  probably  been  at  least 
as  rapid  as  the  increase  in  the  supply  of  gold.  "  Thus 
not  only  has  gold  become  far  more  plentiful,  but  the 
credit  currency  based  upon  it  in  leading  commercial 
countries  has  also  enormously  increased  though  the 
growth  in  the  United  Kingdom  is  much  smaller  than 
in  Germany  and  the  United  States. "  At  another  point 
the  author  estimates  that  the  increased  use  of  credit  in 

1  "Gold,  Pric&s  and  "Wages,"  by  J.  A.  Hobson,  London,  Metbuen 
and  Co.,  1913,  p.  29. 
1  See  Appendix  H. 


148       BEDUCING  THE  COST  OF  LIVING 

the  United  States  is  "  about  the  equivalent  of  the  rate 
of  gold  circulation."1  The  combined  increase  in  the 
gold  supply  and  the  increase  in  the  supply  of  credit 
money  constitute  an  immense  increase  in  the  circulat- 
ing medium  of  the  community. 

Exactly  how  much  of  the  recent  increase  in  prices  is 
due  to  the  increase  in  the  gold  supply  is  not  at  all 
clear.  Certainly  the  increasing  of  the  gold  supply  in 
a  more  rapid  ratio  than  the  increasing  of  the  other 
commodities  for  which  it  is  exchanged  tends  to  raise 
prices.  What  modifying  influence  the  fact  that  silver, 
bank  notes,  and  privately  issued  credit  instruments, 
which  are  not  gold,  have  on  the  situation  must  remain 
a  matter  of  controversy. 

7.    THE  INCREASE  IN  MONEY  is  NOT  THE  SOLE 
CAUSE 

Certainly  the  increase  in  the  amount  of  gold  and  of 
credit  instruments  is  not  the  sole  cause  of  advancing 
prices.  Can  it  be  fairly  insisted  that  the  increase  in 
the  amount  of  gold  is  a  dominating  influence  I 

The  writings  of  students  and  propagandists  alike 
abound  in  statements  about  the  "general  level  of 
prices,"  about  "the  price  curve,"  and  about  "the 
movement  of  general  prices."  These  statements  pre- 
suppose that  there  is  a  level  of  prices  in  the  same  sense 
that  there  is  a  total  amount  of  gold  or  of  iron  in  the 
community.  Professor  Fisher,  for  example,  formulates 
a  definition  of  "  general  prices  "  in  this  way  : — "  There 
was  no  need  of  such  a  definition  so  long  as  we  as- 

luAn  Introduction  to  the  Study  of  Prices."  W.  T.  Lay  ton, 
London,  Macmillan  and  Company,  1912,  p.  86. 


THE  INCREASING  GOLD  SUPPLY        149 

suiiied,  as  we  have  usually  done  hitherto,  that  all 
prices  move  in  perfect  unison.  But  practically  prices 
never  do  move  in  perfect  unison.  Their  dispersion 
would  render  impossible  the  statistical  study  of  gen- 
eral price  movements  were  there  no  practical  method 
of  indicating  the  general  movement.  A  simple  figure 
indicating  the  general  trend  of  thousands  of  prices  is  a 
great  statistical  convenience."1  Such  a  figure  is  in- 
deed, as  Professor  Fisher  suggests,  "a  great  statistical 
convenience,"  but  is  it  a  sound  method  of  procedure? 
No  one  who  has  examined  the  wholesale  price  lists  and 
observed  that  the  products  of  laud  show  an  extremely 
rapid  increase,  while  the  products  of  manufacture 
show  in  many  cases  an  actual  decrease  and  in  other 
cases  slight  increases,  can  believe  that  it  is  a  valid  gen- 
eralization. 

The  extreme  advocates  of  the  theory  that  the  in- 
creased gold  supply  is  the  principal  cause  of  the  in- 
creased cost  of  living,  treat  the  dispersion  of  prices  as 
an  insignificant  matter.  The  supply  of  gold  has  in- 
creased ;  prices  have  increased.  Mr.  Holt,  for  ex- 
ample, assumes  that  this  increase  over  a  certain  period 
has  amounted  to  fifty  per  cent.,  which  he  says  is 
equivalent  to  the  increase  in  the  supply  of  gold  during 
that  time.  Mr.  Holt,  in  this  statement,  fails  to  con- 
sider one  very  significant  fact,  namely,  that  his 
"  prices  "  are  in  one  sense  entirely  meaningless,  because 
they  denote  not  the  prices  actually  paid  for  commodi- 
ties, but  a  mathematical  abstraction  known  as  an 
"  average  "  which  is  based  on  actual  prices. 

Theoretically,  if  the  amount  of  the  circulating 
1  "  The  Purchasing  Power  of  Money,"  Op.  Cit.,  p.  184. 


150       KEDUCING  THE  COST  OF  LIVING 

medium  is  in  any  large  sense  a  cause  of  the  increase  in 
prices,  the  prices  of  all  commodities  should  have  risen 
in  approximately  the  same  ratio.  Suppose,  for 
example,  that  the  total  amount  of  gold  increased  forty 
per  cent  Then,  all  other  things  being  equal,  prices 
of  commodities  should  rise  forty  per  cent.  Inven- 
tions, improved  processes,  unusual  scarcity,  and  simi- 
lar causes  would  modify  the  prices  of  individual 
commodities.  Generally  speaking,  the  rise  would  ap- 
proximate forty  per  cent,  in  the  great  number  of  cases. 
When  the  prices  of  all  commodities  for  the  past  dozen 
years  are  added  together  and  averaged,  some  such  re- 
sult is  obtained.  If  the  problem  is  handled  in  Mr. 
Holt's  offhand  manner,  this  forty  per  cent,  is  set  off 
against  the  forty  per  cent,  increase  in  the  amount  of 
gold  and  the  case  is  proved. 

This  unscientific  method  will  not  stand  even  the 
most  cursory  analysis.  In  the  first  place,  the  volume 
of  credit,  the  rapidity  of  circulation,  and  the  volume 
of  business  are  left  wholly  out  of  account.  In  the  sec- 
ond place,  it  is  assumed  that  a  certain  thing — an  in- 
crease of  forty  per  cent. — has  happened  to  prices. 
Nothing  could  be  farther  from  the  truth.  In  certain 
lines  of  goods  the  price  advances  have  been  very 
considerable.  On  the  other  hand,  the  prices  of  cer- 
tain other  commodities  have  advanced  less  rapidly,  or 
have  actually  decreased.  The  same  thing  is  true  of 
labor,  which,  like  any  other  commodity,  should  show 
a  rise  proportional  to  the  increase  in  the  gold  sup- 
ply. As  a  matter  of  fact,  wages  show  nothing  of  the 
sort.  Some  have  risen  very  greatly ;  others  have  de- 
creased sharply.  In  short,  the  facts  fail  to  bear  out 


THE  INCREASING  GOLD  SUPPLY        151 

the  theories  which  Professor  Fisher  and  those  who 
are  supporting  his  contentions  have  so  vigorously 
advanced. 

8.  THE  FALLACY  OF  GENERAL  PRICES 
This  statement  needs  for  its  support  a  reference  to 
any  authoritative  schedule  of  recent  price  changes. 
Among  food  products,  the  prices  of  meats  have  in- 
creased out  of  all  proportion  to  the  increase  in  the 
prices  of  other  products.  Between  1890  and  1912, 
round  steak  increased  seventy-five  per  cent.  ;  pork 
chops,  ninety  per  cent.  ;  and  bacon,  one  hundred  per 
cent.  During  the  same  period  the  price  of  wheat  flour 
rose  twenty  per  cent.  ;  of  corn-meal,  sixty  per  cent.  ; 
of  fresh  eggs,  sixty  per  cent. ;  and  of  fresh  milk,  thirty- 
five  per  cent.  ;  while  the  price  of  granulated  sugar 
decreased  ten  per  cent.1  An  even  greater  variation 
appears  in  the  prices  of  raw  materials.2 

Wholesale  price  statistics  show  that  certain  com- 
modities report  rapid  price  advances.  They  are  lum- 
ber, grain,  meat,  leather,  petroleum,  and  coal.  The 
scarcity  of  meat  and  leather  products  has  already 
been  explained.  The  growing  scarcity  of  timber,  of 
coal,  and  of  petroleum  needs  no  emphasis.  They  are 
among  the  rapidly  disappearing  resources.  A  price 
advance  in  these  products  seems  inevitable.  On  the 
other  hand,  the  prices  of  most  manufactured  products 
have  risen  only  slightly,  or  have  actually  decreased. 
There  is  no  general  movement  in  the  prices  of  coni- 

1  Bulletin    113,  United  States   Bureau  of  Labor,    Washington, 
Government  Printing  Office,  1913. 
1  See  Chapter  XIII. 


152       BEDTTCING  THE  COST  OP  LIVING 

modities.  Some  prices  have  risen  enormously  ;  others 
have  fallen  considerably.  Prices  have  been  varying 
in  widely  different  ratios,  while  the  increased  gold 
supply  has  been  the  same  for  all  commodities. 

By  a  coincidence  there  is  some  correspondence  be- 
tween the  increased  gold  supply  and  the  increase  in 
" average"  prices.  Gold  is  exchanged,  not  for  "gen- 
eral commodities,"  but  for  individual  commodities. 
When  analyzed  into  prices  for  individual  commodities 
the  coincidence  between  the  rate  of  increase  in  prices 
and  in  the  gold  supply  is  plainly  disestablished. 

9.  GOLD  MOVEMENTS  AND  PRICE  MOVEMENTS 
There  is  one  further  test  to  which  the  theory  that 
the  increasing  gold  supply  is  largely  responsible  for 
the  increase  in  prices,  may  be  subjected.  If  it  is  true 
that  the  general  price  level  depends  upon  the  gold 
supply,  then  there  should  be  some  correspondence  be- 
tween the  movement  of  general  prices  and  the  supply 
of  gold  in  the  community.  It  is  significant  to  note 
that  no  such  correspondence  exists.  A  proof  of  this 
statement  will  be  found  in  a  comparison  between 
price  movements  on  the  one  hand,  and  the  annual 
production  and  total  supply  of  gold  on  the  other. 

Prices  do  not  vary  with  the  supply  of  gold.  During 
the  years  between  1890  and  1897,  the  annual  produc- 
tion of  gold  almost  doubled.  The  entire  period  was 
one  of  abnormally  low  prices,  reaching  their  lowest 
levels  in  1895  and  1896.  From  1897  to  1900,  the 
annual  supply  of  gold  increased  only  slightly,  but  the 
rise  in  prices  was  extremely  rapid.  On  the  other 
hand,  from  1903  to  1907,  prices  rose,  then  fell  again, 


THE  INCREASING  GOLD  SUPPLY        153 

entirely  independent  of  the  almost  regular  increase  in 
the  production  of  gold. 

The  quantity  theorists,  in  reply,  urge  that  these 
short- time  fluctuations  are  not  subject  to  the  gold  sup- 
ply influence,  which  operates  only  over  long  periods. 
That  statement  calls  into  question  the  price  movements 
of  the  past  century. 

A  study  of  the  price  movements  of  the  nineteenth 
century,  side  by  side  with  the  increase  in  the  produc- 
tion of  gold,  fails  to  show  any  close  correspondence 
between  the  two.  The  nineteenth  century  price  cycles 
—falling  prices,  1820-1849 ;  rising  prices,  1849-1874 ; 
falling  prices,  1874-1896 ;  and  rising  prices  1896  to 
date — seem  to  have  occurred  independently  of  the 
curve  of  gold  production.1  Between  1854  and  1894 
the  yearly  production  of  gold  varied  only  slightly. 
During  that  time  prices  rose  to  1874,  and  fell  to  1896. 
During  this  period  of  static  gold  production  there 
occurred  one  of  the  most  marked  price  cycles  of  which 
history  offers  a  record.  There  is,  then,  no  marked 
historical  correspondence  between  the  rate  of  gold 
production  and  price  fluctuations. 

The  same  conclusion  must  follow  from  a  study  of 
the  total  amount  of  gold  in  existence.  In  1850,  it  was 
estimated  at  $1,606,400,000.  This  total  has  increased 
steadily,  until  1858  at  the  rate  of  three  per  cent,  per 
year  ;  until  1870  at  the  rate  of  two  per  cent,  per  year ; 
until  1893  at  the  rate  of  one  per  cent,  per  year ;  and 
since  that  time  at  an  increasing  ratio.2 

1  "Introduction  to  the  Study  of  Prices,"  Op.  Cit.     Chart  oppo- 
site page  157. 

2  "The  Gold  Supply,"  Op.  Cit.,  pp.  76-78. 


154       EEDUCING  THE  COST  OF  LIVING 

10.    How  POTENT  A  FORCE  is  THE  INCREASING 
GOLD  SUPPLY! 

There  is  no  possible  way  of  measuring  the  amount 
of  circulating  medium  (gold  plus  all  other  forms  of 
money  and  credit)  during  the  nineteenth  century.  If 
such  a  measure  were  possible,  there  is  no  reason  to 
suppose  that  there  would  be  any  more  correspondence 
between  the  total  circulating  medium  and  prices  than 
there  is  between  the  gold  supply  and  prices. 

There  is  here  no  intention  to  cast  discredit  upon  the 
quantity  theory  of  money.  Its  advocates  are  unques- 
tionably correct  when  they  assume  that  the  exchange 
value  of  a  commodity  is  affected  by  its  abundance  or 
scarcity.  There  has  been  an  increase  in  the  supply  of 
gold.  All  other  things  beiDg  equal,  this  increase  in  the 
supply  of  gold  should  correspondingly  alter  the  prices 
of  commodities.  All  other  things  have  not,  however, 
been  equal.  A  marked  increase  in  population  has  out- 
stripped the  supply  of  certain  raw  materials.  Credit 
money  has  entered  as  a  disturbing  factor  ;  there  has 
been  an  enormous  increase  in  the  production  of  certain 
commodities  which  gold  is  used  to  purchase.  The  in- 
crease in  the  amount  of  gold  is  doubtless  a  contribut- 
ing cause  in  the  increase  of  prices,  but  its  effect  upon 
the  rising  cost  of  living  has  been  seriously  exaggerated. 

The  past  two  decades  have  witnessed  an  increased 
gold  supply,  and  an  increase  in  the  prices  of  commodi- 
ties. That  the  increase  in  the  supply  of  gold  has  been 
an  element  in  this  increase,  none  can  doubt.  That  it 
has  been  the  only  element,  or  even  an  element  of  pre- 
ponderating importance,  there  is  no  evidence  what- 
ever to  prove. 


XII 

INDUSTBIAL  COMBINATION  AND  MONOPOLY 
AND  THE  COST  OF  LIVING 

1.    ARE  THE  TRUSTS  TO  BLAME  ? 

To  the  question,  "  What  has  been  the  chief  cause  of 
the  high  cost  of  living  ?  "  probably  three  people  out  of 
four  would  give  an  offhand  answer,  "The  trusts." 
It  is  taken  for  granted  that  the  trusts  are  the  chief  of- 
fenders—the most  arduous  "price-boosters."  When 
an  increase  in  the  price  of  any  commodity  is  an- 
nounced, the  papers  write  a  head-line  in  which  the  word 
"  trust  "  features  prominently.  The  very  existence  of 
high  prices  is  looked  upon  as  conclusive  evidence  of  the 
presence  of  a  trust. 

No  patent  fallacy  ever  secured  a  firmer  hold  upon 
the  public  mind  than  has  this  belief  in  the  necessary 
connection  between  price  increases  and  trusts.  To  be 
sure  there  are  trusts,  and  there  have  been,  and  still  are, 
rising  prices.  To  date,  no  one  of  the  many  efforts 
made  has  seriously  implicated  a  large  business, 
monopoly,  or  trust  in  a  general  effort  to  increase 
prices.  A  careful  study  of  price  changes  during  the 
period  of  trust  formation  fails  to  show  any  significant 
connection  between  trust  organization  and  the  increased 
cost  of  living.  Indeed,  there  are  several  instances  in 
which  the  products  of  trusts  have  decreased  in  price 
during  the  past  twenty  years. 


156       BEDUCING  THE  COST  OF  LIVING 

There  is,  of  course,  another  very  obvious  issue, 
namely,  that  the  trusts  have  failed  to  decrease  the 
prices  of  their  products  in  proportion  to  their  decreas- 
ing costs  of  production.  This  may,  or  may  not,  be 
true.  The  available  facts  furnish  no  conclusive  answer 
on  either  side,  but  it  very  apparently  has  no  bearing 
upon  the  relation  between  the  trusts  and  the  present 
increasing  cost  of  living. 

The  connection  so  generally  suspected  between  trusts 
and  rising  prices  is  largely  a  matter  of  coincidence. 
The  modern  upward  price  movement  received  its 
impetus  in  the  same  period  (1896-1903)  in  which  the 
wide-spread  trustification  of  American  industry  took 
place.  It  is  therefore  easy  to  understand  why  public 
opinion  should  associate  price  increases  and  trust 
organization.  The  two  events  took  place  side  by  side, 
but  in  no  sense  can  one  be  looked  upon  as  the  cause  of 
the  other. 

Professor  J.  W.  Jenks,  who  was  the  expert  employed 
by  the  government  in  making  the  investigation  of 
trusts  under  the  Industrial  Commission,  has  had  as  good 
an  opportunity  as  any  man  in  the  United  States  to 
study  the  trust  question  in  all  of  its  bearings.  His 
book  on  "  The  Trust  Problem ' '  gave  the  first  results  of 
his  study  of  the  effect  of  trusts  on  society.  His  later 
studies  have  been  embodied  in  a  number  of  carefully 
worked  articles.  Writing  in  1910  under  the  caption 
"  Do  Trusts  Make  High  Prices  ?  "  Professor  Jeiiks  has 
this  to  say  : l  "  On  the  whole  it  may  be  noted  not 
merely  from  the  prices  first  quoted  in  the  table,  but 

1  "  Do  the  Trusts  Make  High  Prices?"  J.  W.  Jenks,  Review  of 
Reviews,  Vol.  41,  p.  348  (1910). 


INDUSTRIAL  COMBINATION  157 

also  from  the  course  of  prices,  .  .  .  that  the 
general  trend  of  prices  of  most  products  since  1895  or 
1896  has  been  strongly  upward.  .  .  .  The  study 
of  the  course  of  prices  of  special  articles  shows  that  a 
great  industrial  combination  like  the  American  Sugar 
Refining  Company  or  the  United  States  Steel  Corpora- 
tion, or  the  Standard  Oil  Company,  which  controls  a 
large  percentage  of  the  entire  output,  may  exert  a 
very  decided  influence  upon  the  market  in  the  way  of 
either  increasing  or  lessening  the  prices  or  of  steady- 
ing them. 

u  In  certain  instances  at  least  the  combinations  have 
increased  these  prices  beyond  competitive  rates,  and 
presumably  in  some  cases  beyond  what  would  be  con- 
sidered rates  sufficient  to  produce  a  fair  profit. "  There 
are,  on  the  other  hand,  certain  cases  in  which  "the 
combinations  have  felt  it  wise  to  hold  prices  down  and 
to  maintain  steadiness  of  prices  throughout  great 
changes  of  demand.  Since  a  number  of  the  great  trusts 
were  formed  before  the  general  rise  in  prices  began,  and 
since  their  policy  of  exploitation  of  the  consumer  has 
usually  been  greatest  at  the  beginning,  we  could,  indeed, 
not  say  that  the  late  increase  in  prices  is  due  to  them, 
even  though  they  have  exerted  steadily  some  influence 
toward  making  some  prices  high.  The  general  con- 
clusion must  be  that  the  late  great  general  increase  in 
prices  cannot  be  ascribed  to  the  trusts,  especially  the 
prices  that  mainly  affect  the  cost  of  living,  though  they 
are  probably  responsible  for  a  small  part  of  it." 

This  statement  is  made  at  the  conclusion  of  a  very 
elaborately  prepared  article  illustrated  with  a  number 
of  charts  showing  the  tendency  of  prices  for  the  differ- 


158       KEDUCING  THE  COST  OF  LIVING 

ent  trust-made  products.  Professor  Jenks's  data  seem 
in  every  way  to  warrant  his  conclusion.  Since  this 
article  was  published,  a  number  of  additional  price 
figures  have  become  available.  All  of  these  tend  to 
substantiate  the  statement  with  which  Professor  Jeuks 
concludes  his  article. 

2.    WHAT  is  A  TRUST  f 

The  term  "trust "  is  used  in  such  a  loose  way  that  it 
is  impossible  to  draw  a  line  which  will  distinguish 
those  businesses  which  are  trusts  from  those  busi- 
nesses which  are  not  trusts.  Whether  the  word 
should  mean  power  to  regulate  prices,  or  merely 
large  size,  has  not  yet  been  popularly  decided.  Mean- 
while, a  number  of  great  business  enterprises  are  gen- 
erally designated  as  "  trusts."  In  most  cases  these 
enterprises  are  concerned  with  the  making  of  things 
used  in  every-day  life.  In  many  cases  they  produce 
their  own  raw  materials  from  their  own  mines  or 
forests.  In  any  case,  an  answer  to  the  question  con- 
cerning the  effects  of  trusts  on  prices  can  best  be  secured 
by  an  examination  of  the  prices  charged  for  trust-made 
products.  Without  attempting  to  define  the  term 
"trust,"  the  prices  of  products  manufactured  by  those 
industries  which  are  popularly  regarded  as  trust-con- 
trolled will  be  examined.1 

3.    THE  TRUST  BOLL  CALL  ON  PRICE  INCREASES 
The  oldest  and  by  far  the  most  notorious  of  the  trusts 
is  the  Standard  Oil  Company,  which  was  organized  in 

1  All  the  prices  here  cited  are  taken  from  Bulletin  114  of  the 
United  States  Bureau  of  Labor,  "Wholesale  Prices,  1890-1912." 


INDUSTRIAL  COMBINATION  159 

1870.  Since  the  time  of  its  organization,  the  price  of 
oil  has  tended  steadily  downward.  In  1871  oil  was 
twenty-five  cents  per  gallon;  in  1912  the  price  was 
about  one-third  of  the  1871  price.  Since  1890  there 
has  been  a  slight  upward  tendency  in  the  price  of  oil. 
Crude  oil  (the  raw  material  which  is  not  generally 
owned  by  the  Standard  Oil  Company)  has  risen  about 
seventy-five  per  cent.  Refined  oil  for  export  and  do- 
mestic use  has  increased  about  twelve  per  cent.  On 
the  whole,  therefore,  the  Standard  Oil  Company  has 
decreased  prices  very  markedly  since  its  organization  ; 
and  since  1890,  in  the  face  of  increasing  prices  for  raw 
material,  it  has  held  the  price  of  the  finished  product 
practically  stationary.  That  the  Standard  Oil  Com- 
pany has  made  huge  profits  is  a  matter  of  record,  but 
the  facts  show  very  clearly  that  these  profits  are  the 
result  of  decreasing  cost  of  manufacture ;  they  have 
not  come  through  the  raising  of  prices  to  the  con- 
sumer. 

The  Sugar  Trust,  like  the  Standard  Oil  Company, 
enjoys  no  enviable  reputation  ;  yet  the  price  of  sugar, 
like  the  price  of  oil,  has  not  been  materially  increased 
in  recent  years.  In  fact,  between  1890  and  1912  there 
is  a  decrease  of  about  twenty -five  per  cent.  It  is  very 
difficult  to  make  any  conclusive  statement  regarding 
sugar,  because  of  the  extreme  fluctuations  in  prices 
from  year  to  year.  Granulated  sugar  sold  in  1890  for 
a  little  more  than  six  cents  wholesale,  and  in  1912 
for  slightly  over  five  cents  wholesale.  On  the  whole, 
the  price  of  refined  sugar  has  followed  the  price 
of  raw  sugar  with  remarkable  fidelity.  In  neither 
case  has  the  trust  increased  the  cost  of  living  by 


160      EEDUCING  THE  COST  OF  LIVING 

rising  prices ;  rather,  it  has  tended  toward  price 
diminution. 

Perhaps  no  recent  combination  of  capital  has  at- 
tracted more  attention  than  the  Steel  Trust,  which  was 
organized  in  1901.  An  examination  of  the  price  of 
steel  products  shows  that  the  only  effect  of  the  Steel 
Trust  was  to  steady  prices.  The  price  of  steel  rails  de- 
clined from  $166  a  ton  in  1867,  to  $27.33  per  ton  in 
1901.  Beginning  in  1902,  the  price  was  fixed  by  the 
Steel  Trust  and  maintained  at  $28  a  ton.  This  price 
is  considerably  in  excess  of  the  prices  for  1897  and 
1898  ($18.75  and  $17.62,  respectively).  With  the  ex- 
ception of  these  two  years,  however,  there  is  no  record 
of  prices  materially  below  the  rate  of  $28  fixed  by  the 
Steel  Trust.  The  price  of  steel  billets  was  lower  in 
1912  than  in  1901  by  $1.75  a  ton  ;  bar  iron  had  de- 
creased nearly  $5.00  per  ton  in  price,  while  wire  nails 
had  declined  from  $2.36  to  $1.74  per  hundred  pounds. 
Since  the  organization  of  the  Steel  Trust  there  has  been 
a  decrease,  rather  than  an  increase,  in  the  prices  of 
steel  products.  The  trust  proved  to  be  a  steadier, 
rather  than  a  raiser,  of  prices. 

There  are  a  number  of  other  trusts  more  or  less 
widely  known,  whose  influence  upon  prices  does  not 
require  extended  comment.  Since  the  organization  of 
the  Tobacco  Trust  there  has  been  a  slight  increase  in 
the  price  of  tobacco.  Plug  tobacco  between  1890  and 
1912  increased  in  price  less  than  ten  per  cent.,  while 
granulated  smoking  tobacco  rose  twenty-five  per  cent. 
Nearly  all  of  this  increase  in  both  cases  was  recorded, 
however,  before  the  formation  of  the  trust.  Since 
that  time  prices  have  shown  no  material  change. 


161 


Despite  the  wide-spread  protest  against  the  activities 
of  the  Paper  Trust,  paper  products  have  decreased  very 
materially  in  price.  The  average  price  of  newspaper 
per  pound  was  in  1890  $.0382  ;  in  1912,  $.0216.  In  the 
same  way  wrapping  paper  decreased  from  $.0575  to 
$.  0488.  On  the  list  of  wholesale  price  decreases  between 
1890  and  1912  there  are  few  more  extreme  than  the  de- 
creases in  the  price  of  paper  products.  Again  the 
trust  has  lowered,  not  raised,  prices. 

The  products  of  the  Drug  Trust  show  no  general 
tendency.  Between  1890  and  1912  grain  alcohol  rose 
over  twenty  per  cent.  ;  wood  alcohol  decreased  fifty 
per  cent.  The  price  of  lump  alum  and  refined  glycerin 
remained  practically  stationary.  Muriatic  acid  in- 
creased twenty-five  per  cent.  Quinine  decreased  to 
about  one-half  of  the  1890  price.  Opium  rose  very 
rapidly,  nearly  trebling  in  price.  Most  drugs  do  not 
show  a  material  price  advance. 

The  products  of  the  Glass  Trust  are  among  those 
showing  lowered  prices.  Glassware  shows  a  uniform 
decrease  in  price  between  1890  and  1912;  plate  glass 
decreased  fifty  per  cent.  ;  the  price  of  window  glass  re- 
mained stationary.  The  Glass  Trust,  therefore,  cannot 
be  accused  of  raising  prices. 

4.    SOME  TRUST  PRODUCTS  THAT  EEPORT  PRICE 
INCREASE 

The  cases  thus  far  cited,  covering  the  prices  of  prod- 
ucts made  by  the  principal  trusts,  show  without  excep- 
tion a  progressive  decrease,  or  little  change  in  price. 
There  are  a  number  of  cases  in  which  the  presence  of 
a  trust  has  made  an  apparent  difference  in  the  price  of 


162       REDUCING  THE  COST  OF  LIVING 

the  product.  A  careful  study  of  the  price  of  woolen 
cloth  and  clothing  shows  a  number  of  increases,  usually 
less  than  twenty  per  cent.  This  increase  has  occurred 
in  the  face  of  a  decreasing  price  for  wool.  The  Woolen 
Trust  is  producing  a  product  which  has  showed  regular 
price  advances. 

A  favorite  subject  for  trust  manipulation  has  been 
the  manufacture  of  proof  spirits.  Through  various 
changes  of  fortune  this  trust  has  passed,  but  without 
materially  altering  the  price  of  the  product.  In  1890 
the  average  price  of  proof  spirits  per  gallon  was  $1.05  ; 
in  1912  the  average  price  was  $1.36.  During  this 
period  there  was  considerable  variation  in  price,  with 
a  constant  tendency  to  increase. 

Boots  and  shoes  have  risen  in  price  between  1890  and 
1912.  The  increases  for  different  grades  vary  from  ten 
to  thirty  per  cent.  At  the  same  time,  the  price  of 
leather  has  risen  about  thirty  per  cent.  This  holds 
true  for  harness  leather,  as  well  as  for  shoe  leather. 
In  the  boot  and  shoe  industry,  the  price  for  the  prod- 
ucts has  risen  no  faster,  if  quite  as  fast,  as  the  price  of 
the  raw  material. 

The  price  of  coal  likewise  showed  an  upward  tend- 
ency. This  is  particularly  true  in  the  case  of  anthra- 
cite coal,  the  control  of  which  is  commonly  ascribed  to 
the  Coal  Trust.  Here  the  greatest  increase  has  been  in 
chestnut  coal,  the  wholesale  price  of  which  increased 
from  $3.35  in  1890,  to  $5.28  in  1912.  Broken  egg  and 
stove  coal  show  increases  slightly  less  than  this.  At 
the  same  time,  the  price  of  bituminous  coal,  which  is 
not  generally  regarded  as  a  trust  product,  has  risen  in 
certain  cases  more  than  fifty  per  cent. 


INDUSTRIAL  COMBINATION  163 

5.    THE  TRUSTS  HAVE  NOT  EAISED  PRICES 

Obviously  there  is  little  connection  between  the  trusts 
and  rising  prices.  Popular  opinion  to  the  contrary 
notwithstanding,  most  of  the  trusts  have  played  no 
material  part  in  increasing  the  cost  of  living. 

Even  among  those  trust-made  products  which  have 
advanced  in  price  there  have  been  no  very  extreme 
price  increases.  As  already  indicated,  there  have 
been  general  price  increases  in  all  forms  of  products 
during  the  past  two  decades.  Taking  the  trusts  as  a 
group,  the  prices  of  their  products  have  risen  less  than 
the  prices  of  commodities  at  large. 

These  facts,  while  relieving  the  trusts  from  any  re- 
sponsibility for  the  increase  in  the  cost  of  living,  do  not 
in  any  way  affect  the  quite  patent  fact  that  some  of  the 
trusts  have  reaped  exorbitant  profits  through  the 
conduct  of  the  industries  which  they  control.  They 
have  not  increased  prices,  but  neither  have  they  de- 
creased them  in  proportion  to  decreasing  costs  of  pro- 
duction. Bulwarked  by  patent  monopolies,  franchises, 
and  ample  capital,  they  have  acted  as  price  maiu- 
tainers,  not  as  price  raisers.  This  is,  of  course,  a 
horse  of  another  color ;  but  it  has  a  legitimate  place  in 
the  trust  stables. 

The  trusts  have  played  no  considerable  part  in  the 
price  increases  of  the  past  twenty  years.  Trust  prod- 
ucts have  increased  in  price,  as,  for  example,  in  the 
case  of  shoes,  of  meat,  and  of  lumber  ;  but  in  each  of 
these  cases  the  increase  has  been  in  the  cost  of  the  raw 
material.  Revert  again  to  the  figures  of  price  increase. 
Those  products  which  are  growing  scarce  (meat,  timber 
products,  and  mineral  products)  have  led  the  upward 


164       EEDUCING  THE  COST  OF  LIVING 

march  of  prices.  The  well-organized,  highly  developed 
industries  commonly  known  as  trusts  have  had  no 
material  part  in  raising  prices. 

The  Massachusetts  Commission  on  the  Cost  of  Living 
states  its  conclusion  regarding  the  influence  of  the 
trusts  on  prices  in  these  words:  "The  general  con- 
clusion must  be  that  the  late  great  general  increase  in 
prices  cannot  be  ascribed  to  the  trusts,  especially  the 
prices  that  mainly  affect  the  cost  of  living,  though 
they  are  probably  responsible  for  a  small  part  of  it."  l 

From  what  has  been  said  it  does  not  follow  that  a 
vigorous  supervision  over  the  activity  of  big  businesses 
may  not  result  in  material  price  reductions.  Such  will 
probably  be  the  case.  In  fact,  progress  lies  in  exactly 
that  direction.  Whatever  the  cause  of  the  rising  cost 
of  living,  however,  the  trusts  generally  have  played 
little  part  in  it. 

1  Report  of  the  Massachusetts  Commission  on  the  Cost  of  Living, 
Op.  Cit.,  p.  427. 


XIII 

THE  INCEEASE  IN  THE  COST  OF 
EAW  MATEEIALS 

1.  ARE  PRODUCTION  COSTS  INCREASING  t 
THE  charge  that  they  have  increased  prices  is  an- 
swered by  many  producers  with  the  phrase, — "Increas- 
ing costs  of  production. "  Prices  have  risen,  it  is  true  ; 
but  there  has  been  a  rise  in  the  cost  of  making  goods 
which  is,  in  some  instances,  much  greater  than  the 
increase  in  the  price  of  the  product. 

If  it  can  be  shown  that  the  cost  of  production  has 
increased,  a  corresponding  increase  in  price  is  plainly 
justified.  What  are  the  facts  in  the  case  !  1 

The  issue  is  confused  by  two  elements  which  cannot 
be  accurately  measured.  On  the  one  hand,  the  grade 
of  goods  produced  may  not  be  exactly  the  same  as  the 
grade  produced  at  some  former  time.  On  the  other 
hand,  the  methods  of  manufacture  may  be,  as  in  the 
past  century  they  have  been,  greatly  improved.  If 
poorer  materials  or  different  materials  go  into  products, 
the  increasing  cost  of  production  may  be  in  a  measure 
affected.  If  the  methods  of  manufacture  are  materially 
improved,  there  is  no  question  but  that  there  will  be  a 
consequent  decline  in  the  cost'of  production.  Neither  of 
these  elements  is  measurable.  Therefore  both  must 
1  See  an  analysis  of  production  costs  in  one  industry,  Appendix  F. 


166       BEDUCING  THE  COST  OF  LIVING 

be  looked  upon,  for  the  time  being  at  least,  as  unknown 
quantities.  Meanwhile,  the  question  as  to  the  cost  of 
the  factors  entering  into  production  may  be  made  the 
subject  of  inquiry. 

The  production  or  making  of  any  article  is  dependent 
upon  three  factors, — natural  resources,  capital,  and 
labor.  Without  these  three  no  productive  enterprise 
can  be  carried  on. 

At  the  outset  of  the  discussion,  it  may  be  taken  for 
granted  that  the  responsibility  for  increased  costs  of 
production  cannot  be  laid  at  the  door  of  higher  rates 
of  interest,  or  of  higher  costs  of  transportation.  The 
cost  of  getting  capital  (interest)  has  not  materially  in- 
creased since  1890,  although  there  seems  to  be  no  doubt 
that  interest  rate  is  tending  upward.  Transportation 
rates,  another  important  item  in  production  costs, 
have  not  risen  to  any  considerable  extent.  Therefore, 
if  there  has  been  any  increase  in  production  costs,  the 
responsibility  for  it  must  rest  upon  the  cost  of  natural 
resources,  or  the  cost  of  labor. 

2.  THE  ELEMENTS  IN  PRODUCTION  COSTS  VARY 
All  producers  must  use  land  either  directly,  as  in  the 
case  of  the  farmer  and  the  miner,  or  indirectly,  as  in 
the  case  of  the  factory  owner  and  office-building 
manager.  The  substance  of  the  land  or  its  location  is 
essential  to  every  productive  enterprise.  Increases  in 
land  values  would  therefore  have  the  most  apparent 
effect  on  the  prices  of  those  commodities  coming  directly 
from  the  land, — agricultural  products,  minerals,  aud 
timber.  Those  secondary  industries,  on  the  other 
hand,  which  are  engaged  in  changing  raw  materials 


INCREASE  IN  COST  OF  RAW  MATERIALS    167 

into  more  finished  forms,  are  less  directly  affected  than 
the  primary  industries.  The  price  of  ore  is  one  of  the 
big  elements  in  determining  the  cost  of  making  pig 
iron  ;  it  plays  no  appreciable  part  in  the  case  of  a 
watch  spring,  which  is  essentially  the  product  of  labor. 
Between  these  two  extremes  lie  a  large  number  of 
industries,  more  or  less  independent  of  direct  land 
value  increases.  While  increases  in  land  value  would 
have  a  direct  effect  upon  the  prices  of  those  products 
derived  directly  from  land,  they  would  affect  secondary 
industries  only  as  they  affect  the  cost  of  the  raw 
materials  used  in  a  particular  industry. 

The  secondary  industries  are  dependent  upon  a  sup- 
ply of  raw  materials  which  the  primary  industries 
create.  Almost  all  forms  of  manufacturing  may  be 
classed  as  secondary  industries.  They  take  the  pig 
iron,  the  lumber,  the  cotton  yarn,  and  the  woolen 
cloth,  the  leather,  or  some  other  semi-finished  product, 
and  utilize  it  in  the  making  of  the  special  product  for 
which  their  business  is  organized.  In  the  case  of  these 
industries,  therefore  (and  be  it  said  parenthetically 
that  they  are  the  industries  which  supply  the  food, 
shoes,  clothing,  tableware,  and  other  goods  which 
minister  directly  to  the  wants  of  the  consumer),  the 
question  of  greatest  interest  centers  about  the  price  of 
raw  materials.  Are  these  industries  being  charged 
more  or  less  as  the  years  go  by  for  the  products  upon 
which  their  manufacturing  processes  depend  f  If  the 
prices  of  raw  materials  have  advanced  to  any  appreci- 
able extent,  there  is  every  reason  to  expect  a  corre- 
sponding rise  in  the  prices  of  the  goods  which  are  sold 
to  the  consumer. 


168       EEDUCING  THE  COST  OF  LIVING 

3.  THE  TRUTH  ABOUT  WHOLESALE  PRICES 
A  general  statement  has  been  made  and  accepted 
very  commonly  regarding  the  increase  or  decrease  of 
wholesale  prices.  For  example,  the  United  States 
Department  of  Labor  in  Bulletin  114  (page  15)  pub- 
lishes a  chart  showing  the  change  which  has  occurred 
in  all  of  the  prices  of  all  raw  materials  between  1890 
and  1912.  In  1890  the  price  index  on  raw-material 
prices  was  115.  This  fell  to  84  in  1896  ;  rose  to  133 
in  1907 ;  to  139  in  1910 ;  and  in  1912  stood  at  149. 
Such  a  statement  may  prove  mathematically  of  very 
great  interest.  Practically  it  is  almost  meaningless. 
Consider  a  case  in  point.  During  this  period  from 
1890  to  1912,  while  the  geueral  level  of  raw-material 
prices  rose  from  115  to  149,  the  price  of  barley  rose 
from  111  to  224  ;  the  price  of  choice  cattle,  from  92 
to  176  ;  the  price  of  wheat  flour,  from  120  to  122  ;  the 
price  of  woolen  underwear,  from  106  to  115  ;  and  the 
price  of  refined  petroleum,  from  112  to  126.  On  the 
other  hand,  the  price  of  men's  hosiery  decreased  from 
133  to  98 ;  of  calico,  from  117  to  100 ;  of  raw  silk, 
from  131  to  86 ;  of  worsted  yarns,  from  124  to  118  ; 
of  steel  rails,  from  122  to  107  ;  of  shovels,  from  100 
to  95  ;  and  of  cement,  from  119  to  971  This  illustra- 
tion furnishes  sufficient  proof  that  statements  about  a 
"general  price  level"  are,  on  the  whole,  most  mis- 
leading. During  the  period  of  twenty-three  years 
from  1890  to  1912,  the  prices  of  some  commod- 
ities increased,  the  prices  of  other  commodities  re- 
mained practically  stationary,  and  the  prices  of  a 
third  group  of  commodities  decreased.  No  accurate 
conclusions  can  therefore  be  drawn  from  a  general 


INCREASE  IN  COST  OF  RAW  MATERIALS    169 

curve  of  the  average  prices  of  a  large  number  of  com- 
modities. Aii  analysis  of  individual  prices  alone  will 
afford  an  adequate  basis  for  conclusions. 

The  price  index  numbers  used  by  the  United  States 
Bureau  of  Labor  are  based  on  the  average  price  of  the 
commodity  in  question  from  1890  to  1899.  This  aver- 
age, rather  than  the  price  for  1890,  is  taken,  because  the 
variations  from  year  to  year  in  the  prices  of  some  com- 
modities are  considerable.  Thus  the  year  1890  might 
be  a  year  of  great  scarcity  for  potatoes  and  of  great 
plenty  for  wheat.  The  year  1891  or  1893  might  be  a 
reversal  of  this  situation.  Fairness,  therefore,  demands 
that  prices  over  a  series  of  years  be  adopted  as  a  basis. 

The  index  number  is  computed  as  follows  :  The 
price  of  cotton  cloth  may  have  stood  at  six  cents  a 
yard  in  1890  and  1891 ;  at  ten  cents  in  1892,  1893, 
1894,  and  1895 ;  and  at  twelve  cents  in  1896,  1897, 
1898,  and  1899.  The  average  for  the  ten  years  would 
therefore  be  ten  cents  per  yard.  This  average  price, 
whatever  it  may  be,  is  represented  by  the  number  100. 
The  price  in  1890  would  then  be  eight-tenths  of  100,  or 
80  ;  the  price  in  1892  would  be  ten-tenths  of  100,  or  100 ; 
aud  the  price  in  1896  would  be  twelve-tenths  of  100,  or 
120.  By  using  this  index  number  the  price  movements 
for  various  commodities  can  be  readily  compared. 

4.    THE  CLASSES  OF  RAW  MATERIALS 
The  wholesale  commodities  for  which  the  Depart- 
ment of  Labor  furnishes  prices1  may  be  divided  into 
five  groups : 

"Wholesales  Prices,  "1890-1912.  Bulletin  114,  U.  S.  Bureau  of 
Labor,  Washington,  1914,  pp.  93-94. 


170       REDUCING  THE  COST  OF  LIVING 

Farm  products, 

Cloths  and  clothing, 

Lumber  and  building  materials, 

Metal  and  implements, 

Miscellaneous. 

There  is  a  wide  variation  in  the  price  movements  in 
these  groups.  The  farm  products  present  an  almost 
unbroken  line  of  price  increases.  With  the  exception 
of  sheep,  which  decreased  slightly  in  value,  all  but 
two  of  the  farm  products  listed  by  the  Bureau  of  Labor 
increased  more  than  twenty-five  per  cent.,  and  seven 
of  the  twelve  products  increased  more  than  fifty  per 
cent.  The  following  analysis  shows  changes  in  farm 
products  between  1890  and  1912  : 


Prices  Decreased 


Prices  Increased 


From 

From 

From 

o%  to  24% 

0%  to  24% 

25%  to  49% 

More  than  50% 

Sheep. 

Cotton, 

Oats, 

Barley, 

Wheat. 

Eye. 

Cattle, 

Corn, 

Hides, 

Hogs, 

Hops, 

Timothy  hay. 

So  far,  therefore,  as  the  slaughter-house  industry, 
the  milling  industry,  and  any  other  industries  de- 
pendent upon  meat,  cereals,  hides,  or  hops,  are  con- 
cerned, the  increase  in  the  price  of  raw  materials  con- 
stitutes a  formidable  problem,  amounting  as  it  has 
during  the  past  twenty  years  to  an  increase  of  more 
than  fifty  per  cent,  in  most  cases. 


INCREASE  IN  COST  OF  RAW  MATERIALS    171 

5.     CLOTH  AND  CLOTHING 

A  glance  at  the  following  analysis  of  the  prices  of 
cloths  and  clothing  will  show  an  essentially  different 
situation : 

Prices  Decreased  Prices  Increased 


From 

From 

From 

From 

25%  to  49% 

o%  to  24% 

o%  to  24% 

25%  to  49% 

Hosiery, 
Raw  silk. 

Calico, 
Shirting, 
Wool, 
Worsted  yar 

Broadcloth, 
Canton  flannel, 
Cotton  yarn, 
Q.  Denim, 

Cotton  thread, 
Drillings, 
Horse  blankets, 
Leather. 

Ginghams, 
Overcoatings, 
Print  cloth, 
Sheeting, 
Suitings, 
Ticking, 
White  flannel, 

i  Woolen  dress  goods, 

Woolen  underwear. 

Again  few  products  appear  in  the  column  showing 
decreases, — there  are  six  of  them,  all  related  to  the 
textile  industries.  On  the  other  hand,  thirteen  out  of 
twenty-three  items  listed  show  increases  of  less  than 
twenty-five  per  cent.  ;  and  four  report  increases  be- 
tween twenty-five  and  forty-nine  per  cent.  No  one  of 
the  articles  shows  an  increase  of  more  than  fifty  per 
cent.  In  so  far  as  the  food  supply  of  the  population 
is  dependent  upon  the  raw  products  of  the  farm,  the 
phenomenal  increase  in  retail  prices  is  to  be  antici- 
pated. In  the  prices  of  clothing,  on  the  other  hand, 
no  such  increase  appears  to  be  justifiable,  since  most 
of  the  raw  materials  of  which  clothing  is  composed  do 
not  show  any  considerable  price  advances. 


172      EEDUCING  THE  COST  OF  LIVING 

6.  LUMBER  AND  BUILDING  MATERIALS 
The  third  group  of  commodities,  lumber  and  build- 
ing materials,  is  in  like  case  with  farm  products. 
There  are  only  a  few  exceptions  in  this  list  of  whole- 
sale prices  to  the  general  rule  that  there  has  been  a 
considerable  increase  in  the  cost  of  building  material. 

Prices  Decreased  Prices  Increased 


From  From  From  From 

25%  to  49%    o%  to  24^0    o%  to  24</0     25%  to  4<)<f0  More  than 5o<f0 

Brick, 

Plate  glass,      Cement.       Linseed  oil,     Hard  maple,   Hemlock, 
Putty.  Lime,  Shingles,         Poplar, 

Oxide  of  zinc,  Tar.  Rosin, 

Pine  doors,  Spruce, 

Turpentine,  White  oak, 

Window  glass.  White  pine, 

Yellow  pine. 

The  prices  of  cement,  plate  glass,  and  putty  have 
decreased  somewhat.  Seven  articles  show  slight  in- 
creases. All  of  the  forest  products  except  turpentine, 
on  the  contrary,  have  increased  in  price  more  than 
twenty-five  per  cent.  Hard  maple  and  shingles  fall  in 
the  class  for  which  the  increase  has  been  from  twenty- 
five  to  forty-nine  per  cent.  The  other  timber  products 
show  a  much  greater  rise  in  value.  Hemlock,  for  in- 
stance, increased  seventy  per  cent.  ;  white  oak,  fifty 
per  cent.  ;  white  pine,  one  hundred  and  twenty  per 
cent.  ;  yellow  pine,  sixty  per  cent.  ;  poplar,  one  hun- 
dred per  cent.  ;  and  spruce,  seventy  per  cent.  In  the 
other  timber  products  a  similar  rise  in  price  is  shown. 
Every  industry  which  is  largely  dependent,  either  for 
building  or  for  its  supplies  of  raw  material,  on  the 
lumber  industry,  has  thus  faced  a  price  increase  in  the 


INCREASE  IN  COST  OF  RAW  MATERIALS    173 

past  twenty  years  equivalent  to  from  fifty  to  one  hun- 
dred pei%  cent. 

7.  METALS  AND  IMPLEMENTS 
The  price  changes  for  metals  and  implements  are 
much  less  than  for  timber  products.  Indeed,  of  the 
twenty  articles  listed,  thirteen  show  decreases  in  price, 
while  seven  show  increases.  Furthermore,  the  in- 
creases of  the  seven  are  comparatively  small,  only 
three — builders'  hardware,  sheet  zinc,  and  pig-tin 
increasing  more  than  twenty-five  per  cent. 

Prices  Decreased  Prices  Increased 


Front 

From 

From 

From       More  than 

^5%  to  49% 

o%  to  24% 

o%  to  24% 

25%  to  49% 

50% 

Barbed  wire, 

Bar  iron, 

Copper  ingots, 

Builders' 

Pig-tiii. 

Bar  silver, 

Copper  wire, 

Pig  lead, 

hardware, 

Nails, 

Lead  pipe, 

Tin  plate, 

Sheet  zinc. 

Steel  billets, 

Pig  iron, 

Tools. 

Wood  screws. 

Quicksilver, 

Sheet  copper, 

Sheet  steel, 

Steel  rails. 

An  examination  of  this  schedule  of  changes  in  the 
prices  of  metal  and  implements  shows  that  iron  and 
steel  products  have  decreased,  while  two  of  the  three 
copper  products  listed  have  increased.  It  is  therefore 
fair  to  conclude  that  the  changes  in  the  prices  of  metal 
and  implements  furnish  no  reason  for  a  radical  in- 
crease in  the  price  of  the  commodities  which  are  im- 
mediately derived  from  these  articles. 

The  last  group  of  commodities  contains  a  miscella- 
neous collection  of  articles,  most  of  which  show  a 
general  price  increase. 


174       KEDUCING  THE  COST  OF  LIVING 


Prices  Decreased 


Jyrices  Increased 


from  From  From 

^5%  to  49%  o%  to  24.%  o%  to  24% 
Manilla  rope.  Paper.      Coke, 

Drags  and 


troleum. 


From  More  than 

.25%  to  49%  50% 

Anthracite  coal,  Crude  pe- 

Bituminous  coal,  troleum, 

chemicals,    Cottonseed  meal,  Malt, 

Refined  pe-    Cottonseed  oil,  Raw  jute. 
Para  rubber, 
Proof  spirits. 


All  of  the  fuels  have  increased  in  price,  coal  and  crude 
petroleum  showing  a  rather  considerable  rise.  Crude 
petroleum,  raw  jute,  and  malt  lead  the  increases.  Of 
the  fourteen  items  listed,  eleven  show  increases,  and 
nine  of  these  show  increases  of  more  than  twenty -five 
per  cent. 

8.  HAS  THE  PRICE  OF  EAW  MATERIALS  INCREASED  t 
Such  a  showing  of  facts  renders  any  form  of  sum- 
mary most  inadequate.  One  thing  is  very  clear, — that 
it  is  impossible  to  say,  offhand,  that  the  prices  of  raw 
materials  have  risen  or  fallen.  The  variation  in  price 
change  from  sharp  decrease  to  sharp  increase  is  so 
considerable  that  no  single  statement  can  do  justice  to 
the  situation.  Even  when  grouped,  the  facts  are  diffi- 
cult to  classify.  It  is  quite  apparent  in  all  five  groups 
that  the  commodities  which  are  directly  dependent 
upon  the  land — i.  e.,  farm  products  and  lumber  and 
building  materials — are  the  leaders  in  price  advance  ; 
that  minerals  and  fuels  have  increased  in  some  cases 
and  decreased  in  others ;  and  that  the  various  other 
items,  including  cloth  and  some  other  manufactured 
products  show  in  many  cases  a  considerable  decrease 
in  price. 


INCREASE  IN  COST  OF  RAW  MATERIALS    175 

Have  production  costs  been  increased  because  of 
an  increase  in  the  cost  of  raw  materials  f  In  the  cases 
of  those  materials  which  are  derived  directly  from  the 
laud,  there  has  been  a  general  increase.  Otherwise 
the  producer,  in  most  industries,  has  been  compelled 
to  pay  an  increase  in  the  price  of  raw  materials  of 
from  ten  to  twenty-five  per  cent. — seldom  more,  and 
frequently  very  much  less. 


XIV 
THE  INCREASE  IN  LAND  VALUES 

1.  THE  PLACE  OF  LAND  IN  PRODUCTION 
THOSE  raw  materials  which  are  most  directly  de- 
pendent on  the  land  show  the  greatest  price  advances. 
Does  it  follow,  as  a  logical  deduction,  that  there  has 
been  a  considerable  increase  in  land  values  ?  Eeason 
declares  that  such  should  be  the  case ;  what  do  the 
facts  indicate? 

Among  all  of  the  value  increases  reported  during 
the  past  two  decades,  the  increases  in  land  value  hold 
first  place.  There  is  no  parallel  in  any  other  field  to 
the  advance  in  those  laud  values  upon  which  civiliza- 
tion must  directly  depend, — timber  lauds,  fertile  farm 
land,  and  land  in  great  centers  of  commerce  and  popu- 
lation. Especially  since  1896  laud  has  advanced  with 
astonishing  rapidity.  So  complete  has  been  the  alter- 
ation of  land  values  during  a  short  period  of  twelve  or 
fifteen  years  that  it  might  be  described  as  revolution- 
ary, without  doing  any  violence  to  language. 

The  early  French  economists  may  have  been  wrong 
in  everything  else,  but  they  were  clearly  right  in  the 
contention  that  all  wealth  is  derived  originally  from 
the  land.  Whether  mine,  farm,  forest,  waterfall  or 
fishery  be  called  upon  to  supply  human  wants,  the 
material  things  with  which  these  wants  are  supplied 


THE  INCBEASE  IN  LAND  VALUES      177 

are  invariably  derived  from  nature's  storehouse.  Take 
what  commodity  you  please,  in  its  original  form  it 
was  a  product  of  nature. 

2.    TIMBER  LAND  VALUES 

For  ease  of  discussion,  land  values  may  be  grouped 
as  follows : ' 

1.  Timber  land  values. 

2.  Farm  values. 

3.  City  land  values. 

The  analysis  of  raw  material  prices  in  the  last 
chapter  called  attention  to  the  unusually  rapid  rise 
in  the  prices  of  lumber.  One  naturally  turns  from 
this  extraordinary  increase  in  the  price  of  timber  prod- 
ucts to  inquire  into  the  increases  in  the  value  of  the 
lands  from  which  timber  comes.  The  Federal  Gov- 
ernment in  the  Eeport  on  the  Lumber  Industry  takes 
up  the  problem  of  standing  timber  in  very  great  detail. 
While  recognizing  the  difficulty  of  making  a  definite 
statement  regarding  the  extent  to  which  timber  land 
has  increased  in  value,  the  writers  of  the  report  are 
nevertheless  struck  by  the  extent  of  the  increase.2 

Eoughly,  during  the  decade  ending  with  1907  or  1908 
(the  period  immediately  before  the  industrial  depres- 

1  Mineral  land  values  and  the  value  of  water  rights  are  omitted 
from  this  discussion  because  of  the  impossibility  of  securing  relia- 
ble data  regarding  them.     See  "The  Increase  in  American  Laud 
Values,"  Scott  Nearing,  Popular  Science  Monthly,  Nov.,  1913,  pp. 
491-505. 

2  "The  Lumber  Industry,"  Parti,  "  Standing  Timber, "  Wash- 
ington, Government  Printing  Office,  1913,  p.  214. 


178       KEDUCING  THE  COST  OF  LIVING 

siou),  the  Federal  investigation  indicates  that  "The 
value  of  a  given  piece  of  southern  pine  taken  at  random 
is  likely  to  have  increased  in  any  ratio  from  threefold  to 
tenfold."1  The  investigators  found  instances  of  even 
greater  increases.  In  the  Lake  region  "  the  general 
ratio  of  advance  of  timber  value  during  the  last  ten  or 
twenty  years  has  probably  been  less  than  in  the  South. 
Perhaps  the  advance  of  any  given  tract,  taken  at 
random,  in  ten  years  from  1898,  was  most  likely  to  be 
between  twofold  and  fivefold."  In  the  Pacific  North- 
west, where  the  development  in  lumbering  has  been 
comparatively  recent,  "a  tract  taken  at  random  is 
likely  to  have  increased  in  any  ratio  from  threefold  to 
tenfold  in  the  ten  years  ending  in  1907  or  1908." 2  Here 
the  proportion  of  extraordinary  advances  "  is  prob- 
ably greater  than  in  the  South." 

The  rise  in  timber  lauds  would  therefore  seem  to 
have  more  than  justified  the  increases  in  the  wholesale 
price  of  lumber.  Even  in  the  older  section,  where  the 
timber  has  been  largely  cut  away,  the  increases  have 
been  rapid.  In  the  newer  sections,  which  have  re- 
cently developed  as  lumbering  regions,  the  rate  of  in- 
crease in  timber  land  values  has  been  little  short  of 
stupendous. 

No  student  can  turn  away  from  these  records  of  the 
increase  of  timber  land  values  since  1890  without  a 
feeling  of  profound  wonder.  Twofold,  fivefold,  ten- 
fold increases  in  a  decade  are  immense,  even  in  a 
developing  country.  That  the  price  of  timber  prod- 

1  "The  Lumber  Industry,"  Part  I,  "Standing  Timber,"  Wash- 
ington, Government  Printing  Office,  1913,  p.  214. 

2  Ibid.,  p.  215. 


THE  INCREASE  IN  LAND  VALUES      179 

ucts  should  have  advanced  rapidly  in  view  of  this 
tremendous  increase  in  the  value  of  timber  lands  goes 
without  saying. 

Timber  is  in  a  peculiar  position,  economically.  A 
hundred  years  ago  it  was  an  obstacle  to  American 
progress ;  to-day  it  is  one  of  its  rapidly  disappearing 
resources.  The  approaching  exhaustion  of  the  timber 
supply  undoubtedly  plays  a  large  part  in  causing  the 
upward  movement  of  prices. 

3.    FABM  LAND  VALUES 

Farm  land  values  present  no  such  unusual  difficulties 
as  those  encountered  in  the  analysis  of  timber  land 
values.  Farming  is  an  established  business.  The  best 
farm  land  of  the  United  States  is  largely  under  cultiva- 
tion. If  properly  pursued,  farming  does  not  exhaust 
the  resources  of  the  land, — rather  it  increases  them. 
Hence,  the  increases  in  farm  land  values  present  an 
illustration  of  very  normal  laud  value  increases. 

The  material  dealing  with  the  increase  in  farm 
values  is  by  far  the  most  accessible  of  all  the  data  on 
land  values  in  the  United  States,  since  the  Bureau  of 
the  Census  makes  elaborate  returns  on  the  subject. 
Although  these  returns  are  open  to  some  very  obvious 
and  often  repeated  criticisms,  they  probably  represent, 
on  the  whole,  a  fairly  accurate  statement  of  the  in- 
crease in  the  value  of  farm  lands  in  the  districts  which 
they  cover.1 

During  the  decade  between  1 900  and  1910  the  value 
of  all  farm  lands  in  the  United  States  increased  from 
$13;058,000,000  to  $28,476,000,000,— equivalent  to 
1  See  Appendix  J. 


180       EEDUCING  THE  COST  OF  LIVING 

118.1  per  cent.  Not  one  of  the  nine  geographical 
divisions  covered  by  the  Census  shows  any  decrease  in 
farm  land  values.  The  increases,  however,  vary  ex- 
tremely. The  least  increase  (19.1  per  cent.)  is  shown 
in  the  Middle  Atlantic  States  ;  the  greatest  increase 
(313  per  cent.)  in  the  Mountain  States.  The  largest 
total  increase  (slightly  more  than  six  billions  of  dol- 
lars) occurred  in  the  Middle  Western  States,  which 
gave  a  percentage  increase  of  one  hundred  and  fifty- 
eight. 

4.    THE  INCREASED  VALUE  OF  WESTERN  FARM 
LAND 

The  total  increase  in  the  value  of  farm  land  for  the 
whole  United  States  was  fifteen  billion,  four  hundred 
and  eighteen  million  dollars,  more  than  thirteen  bil- 
lions of  which  is  credited  to  that  territory  lying  west 
of  Pennsylvania,  north  of  the  Mason  and  Dixon  line, 
and  west  of  the  Mississippi.  In  short,  the  great  farm 
land  value  increases  occurred  in  that  section  of  the 
country  from  which  most  of  the  necessary  food  prod- 
ucts are  derived.  An  examination  of  the  figures 
shows  that  of  the  twenty-two  states  outside  of  this 
area,  none  reports  increases  of  more  than  two  hundred 
per  cent,  while  only  eight  show  increases  of  more 
than  one  hundred  per  cent.  Within  the  area  (west  of 
Pennsylvania,  north  of  the  Mason  and  Dixon  line 
and  west  of  the  Mississippi)  of  the  twenty-seven  states, 
seven  report  increases  of  more  than  two  hundred  per 
cent,  while  nineteen  of  the  twenty-seven  report  gains 
of  more  than  one  hundred  per  cent. 

There  is,  to  be  sure,  a  partial  explanation  of  these 


THE  INCREASE  IN  LAND  VALUES      181 

immense  Western  increases  in  the  increase  in  acreage. 
The  number  of  acres  devoted  to  farming  purposes  is 
greater  in  1910  than  it  was  in  1900.  This  increase  is 
not,  however,  considerable.  Although  the  popula- 
tion west  of  the  Mississippi  increased  thirty  per  cent, 
between  1900  and  1910,  the  total  number  of  farms  in- 
creased only  eighteen  per  cent.,  the  total  amount  of 
land  in  farms  only  nine  per  cent.,  and  the  total  amount 
of  improved  land  in  farms  increased  only  twenty-nine 
per  cent.  If  the  reader  will  bear  in  mind  that  fact 
that  the  northeastern  section  of  the  United  States  is 
increasingly  dependent  upon  the  West  for  its  food 
supply,  the  increase  in  the  amount  of  farm  land  west  of 
the  Mississippi  is  less  than  might  have  been  expected. 

An  appeal  to  the  Census  table  showing  the  value  of 
farm  land  per  acre  bears  out  this  suggestion.  Among 
the  Eastern  States  the  increases  in  farm  land  value  per 
acre  are  comparatively  mall, — less  than  one  hundred 
per  cent,  in  all  but  two  instances.  Among  the  states 
west  of  the  Mississippi,  on  the  other  hand,  the  increase 
in  value  per  acre  has  been  immense — more  than  one 
hundred  per  cent,  in  twenty  out  of  twenty-two  cases, 
more  than  one  hundred  and  fifty  per  cent,  in  ten  out  of 
twenty-two  cases. 

The  total  figures  showed  that  the  bulk  of  the  in- 
crease in  the  farm  land  values  in  the  United  States  be- 
tween 1900  and  1910  occurred  west  of  the  Mississippi. 
The  figures  for  increases  per  acre  lead  inevitably  to 
the  same  conclusions,  namely,  that  the  farm  land  in 
the  states  lying  west  of  the  Mississippi  has  increased, 
during  the  past  decade,  between  one  and  three  hun- 
dred per  cent,  in  value. 


182       KEDUCING  THE  COST  OF  LIVING 

5.    AN  INSTANCE 

The  real  significance  of  the  increase  in  farm  land 
values  to  the  cost  of  living  may  perhaps  best  be 
gained  by  a  consideration  of  one  group  of  states  upon 
which  the  United  States  depends  largely  for  its  food 
supply.  The  North  Central  States  (Ohio,  Indiana, 
Illinois,  Michigan,  Wisconsin,  Minnesota,  Iowa,  Mis- 
souri, North  Dakota,  South  Dakota,  Nebraska  and 
Kansas)  contain  only  a  third  of  the  population  of  the 
United  States,  yet  they  produce  fifty-nine  per  cent,  of 
the  corn,  seventy-four  per  cent,  of  the  wheat,  seventy- 
seven  per  cent,  of  the  oats,  seventy-five  per  cent,  of  the 
barley,  and  sixty-five  per  cent,  of  the  rye  grown  in  the 
United  States.  The  country  is  therefore  dependent 
for  three-quarters  of  its  cereal  foods  on  these  twelve 
states.  Cereals  constitute  about  one-half  of  the  total 
value  of  all  farm  crops.  In  a  peculiar  sense,  therefore, 
these  states  are  the  granary  of  the  nation,  and  the  re- 
lation between  their  production  of  crops  and  the  value 
of  their  farm  lands  is  one  of  extreme  importance. 

Under  such  circumstances,  the  enormous  increases 
in  laud  value  which  occurred  in  these  states  between 
1900  and  1910  is  of  great  significance.  During  that 
decade  the  rural  population  of  the  North  Central 
States  rose  from  15,963,000  to  16,397,000,  an  increase 
of  2.7  per  cent.  During  the  same  decade  the  total 
number  of  acres  in  all  farms  rose  from  317,350,000  to 
350,577,000,  an  increase  of  ten  per  cent ;  and  the  total 
number  of  acres  of  improved  land  in  farms  rose  from 
222, 314, 000  to  253, 232, 000  (thirteen  per  cent).  Here  is 
an  increase  in  population  and  in  acreage  of  about  a 
tenth  during  the  ten-year  period. 


THE  INCREASE  IN  LAND  VALUES      183 

A  comparison  between  this  increase  in  products  and 
in  laud  values  is  astonishing.  The  value  of  all  farm 
property  in  these  states  rose  between  1900  and  1910 
from  Hi  to  23}  billions  of  dollars.  Land  alone  in- 
creased from  7,866  million  dollars  to  17,285  million 
dollars.  The  value  of  buildings  almost  exactly  doubled 
during  the  period,  while  the  value  of  implements  and 
machinery  increased  by  about  four-fifths.  While  the 
population  and  area  in  farms  remained  practically 
stationary,  farm  land  values  more  than  doubled. 

It  will  be  argued,  of  course,  that  the  increasing 
productivity  justified  the  increase  in  valuation.  An 
examination  of  the  figures  proves  this  statement  to  be 
wholly  unfounded.  The  acreage  of  cereal  crops  in 
these  states  was  five  "per  cent,  higher  in  1910  than  in 
1900,  the  number  of  bushels  of  cereals  produced  was 
slightly  less  than  five  per  cent,  higher,  but  the  value 
of  the  cereal  crop  almost  doubled  (976  millions  to 
1,821  millions  of  dollars).  The  acreage  in  hay  and 
forage  increased  twenty  per  cent ;  the  number  of  tons 
produced  increased  by  a  quarter.  The  value  of  the 
product  was  222  millions  in  1899,  and  396  millions  in 
1909.  The  dairy  business  shows  no  material  increase 
in  the  quantity  of  product.  The  butter  yield  for  1900 
was  811  millions  of  pounds  ;  for  1910,  it  was  869  mil- 
lions. The  production  of  eggs  increased  by  slightly 
more  than  a  fifth.  The  amount  of  live  stock  on  the 
farms  in  the  North  Central  States  generally  decreased 
during  the  period  between  1900  and  1910.  There  were 
three  million  less  cattle  on  the  farms  ;  the  number  of 
swine  diminished  by  nearly  five  millions  ;  the  number 
of  sheep  and  goats  decreased  by  a  million  and  a  half ; 


184       EEDUCING  THE  COST  OF  LIVING 

the  number  of  horses  and  mules  increased  by  a  million 
and  a  half ;  and  the  number  of  fowls  increased  by  thirty 
millions  (twenty-five  per  cent).  In  spite  of  this  general 
decrease  in  the  amount  of  live  stock,  the  values  very 
generally  increased,  with  the  exception  of  cattle, 
where  there  was  a  slight  decrease  in  value.  The  value 
of  the  swine  almost  doubled  ;  the  value  of  the  horses 
and  mules  increased  nearly  150  per  cent.  ;  the  value  of 
sheep  and  goats  rose  a  quarter,  while  the  value  of  all 
fowls  nearly  doubled.  All  of  the  crops  produced  by 
the  North  Central  States  were  valued  at  a  billion  and 
a  half  in  1900,  and  at  two  billions  and  a  half  dollars 
in  1910. 

6.  FARM  LAND  VALUES  AND  FOOD  PRICES 
The  facts  indicate  that  in  those  sections  of  the 
United  States  from  which  the  food  products  of  the 
country  are  chiefly  derived,  the  laud  values  during  the 
last  few  decades  have  increased  at  a  very  rapid  pace, 
culminating  in  the  decade  between  1900  and  1910,  with 
an  increase  for  ten  years  of  double,  treble,  or  quad- 
ruple their  1900  values. 

For  manifest  reasons,  the  increases  in  the  values  of 
timber  lands  were  prodigious,  yet  in  many  instances 
they  are  insignificant  when  compared  with  agricul- 
tural land,  which  should  yield  an  essentially  stable 
value  over  so  short  a  period  as  ten  years.  Instead  it 
has  fairly  leaped  into  the  field  of  rising  values. 

7.    THE  VALUE  OF  CITY  LANDS 
With  the  bulk  of  food  products  coming  rather  di- 
rectly from  the  farms,  the  immediate  effect  upon  prices 


THE  INCKEASE  IN  LAND  VALUES      185 

of  the  rapid  increase  in  farm  land  values  may  be 
readily  understood.  The  prices  of  farm  products  have 
risen.  At  the  same  time  the  land  from  which  these 
products  are  derived  has  risen  even  more  rapidly  in 
value. 

While  farm  land  values  constitute  the  chief  concern 
of  the  territory  west  of  the  Mississippi,  the  north- 
eastern section  of  the  United  States  is  interested 
primarily  in  city  land  values.  Innumerable  instances 
might  be  cited  to  support  the  contention  that  city  laud 
values  have  risen.  One  or  two  cases  must  suffice. 

An  effective  study  was  made  by  the  New  York  City 
Club  (Homer  Folks,  Chairman  of  the  Transit  Com- 
mittee) regarding  the  increase  in  laud  values  resulting 
from  the  construction  of  rapid  transit  lines.  Along 
the,  route  of  the  New  Subway,  assessment  values,  as 
given  by  the  Department  of  Taxes  and  Assessments, 
were  taken  for  the  year  of  1900  on  vacant  lots.  These 
were  compared  with  the  assessment  values  of  1907,  the 
figures  in  each  case  representing  one  hundred  per 
cent,  valuation.  "To  ascertain  the  proportion  of  the 
increase  in  land  value  attributable  to  the  building  of 
the  Subway,  it  was  necessary  to  deduct  from  the  total 
rise  what  might  be  termed  a  normal  rise,  or  the  in- 
crease that  would  have  taken  place  through  the 
natural  growth  of  the  city,  without  added  stimulus  of 
a  new  transit  line."  This  normal  rise  was  determined 
by  taking  the  increase  from  1893  to  1900  on  the  same 
territory.  The  study  shows  that  up  to  110th  Street 
the  increase  in  land  values  between  1900  and  1907  was 
about  forty-five  per  cent.  This  equaled  the  normal 
rise  previously  determined.  The  Subway  apparently 


186       REDUCING  THE  COST  OF  LIVING 

made  no  difference  in  this  laud,  because  excellent 
elevated  connections  already  existed.  From  135th 
Street  northward  the  problem  appears  stripped  of  com- 
plications. "The  aggregated  rise  in  this  laud  from 
135th  Street  to  Spuyteu  Duyvil  was  about  $69,300,000. 
The  estimated  normal  rise  of  $20,100,000  was  there- 
fore exceeded  by  $49,200,000,  "apparently  due  to  the 
building  of  the  Subway. "  This  increase  is  one  hundred 
and  four  per  cent,  increase  on  the  value  of  1900.  A 
similar  rise  in  the  laud  values  of  the  Bronx  was  shown. 
Between  the  Harlem  Eiver  and  Bronx  Park,  the  in- 
crease in  laud  values  due  to  the  building  of  the  Subway 
was  $31,300,000. 

The  report  goes  on  to  state  that,  while  the  increase 
in  land  values  above  135th  Street,  due  to  the  building 
of  the  Subway,  was  $39,200,000,  the  cost  of  building 
the  Subway  from  this  point  to  230th  Street  was 
$7,375,000,  or  but  fifteen  per  cent,  of  the  actual  rise 
caused  by  the  new  line.  Similarly,  the  increase  in 
the  Bronx  land  values  of  more  than  thirty  million 
dollars  was  caused  by  subway  construction  costing 
$5,700,000.' 

These  instances  are  typical  of  the  land  value  in- 
creases which  are  so  apparent  in  New  York  City. 
Other  great  centers  of  population,  however,  show 
similar  conditions.  Mr.  C.  B.  Fillebrown,  in  his 
"The  A  B  C  of  Taxation,"  cites  some  interesting  il- 
lustrations of  increases  in  the  land  value  of  Boston. 
For  example,  the  land  values  irrespective  of  irnprove- 

1  Building  of  Rapid  Transit  Lines  in  New  York  City.  A 
memorandum  addressed  to  the  Board  of  Estimates  and  Appro- 
priations by  the  City  Club  of  New  York,  October  2,  1908. 


THE  INCREASE  IN  LAND  VALUES      187 

merits,  "  on  both  sides  of  Winter  Street,  including  the 
estates  on  the  Tremout  and  Washington  Street  corners, 
were,  in  1898,  $61.57  per  square  foot ;  in  1907,  $97.50 
per  square  foot.1  .  .  .  The  laud  in  Winter  Street, 
which  was  assessed  at  less  than  four  dollars  per  square 
foot  in  1850,  was  assessed  in  1907  at  one  hundred  and 
thirty  dollars  per  square  foot.  During  the  fifty-seven 
years  intervening,  the  income,  above  taxes,  from  the 
land,  in  rent  and  appreciation,  has  amounted  to  an 
average  of  one  hundred  and  fifty  per  cent,  annually  on 
the  investment  of  1850.  "2 

Similar  illustrations  might  be  cited  in  endless  detail, 
showing  the  rise  of  land  values  in  American  cities. 
Even  the  casual  observer  must  admit  the  very  obvious 
facts  of  land  value  increase.  The  one  thing  needful  is 
some  accurate  measure  of  their  extent. 

8.  A  SEPARATE  ASSESSMENT,  LAND  AND  IMPROVE- 
MENTS 

There  are  a  few  American  cities  in  which  a  careful 
assessment  of  laud  independent  of  improvements  has 
been  made.  In  New  York  City,  the  land  and  improve- 
ments have  been  separately  assessed  since  1906.  The 
Report  of  the  Commissioners  of  Taxes  and  Assessments 
for  1912  (pages  20-23)  gives  the  land  value  assessments 
in  considerable  detail.  The  value  of  the  laud  alone  for 
Greater  New  York  was,  in  1906,  3,367  million  dollars, 
and  in  1912,  4,563  million  dollars.  This  represents  an 
increase  in  the  per  capita  value  of  land,  from  $811  in 

1  "The  A  B  C  of  Taxation,"  by  C.  B.  Fillebrown,  Doubleday, 
Page  and  Co.,  New  York,  1912,  p.  56. 
8  Ibid. 


188      BEDUCING  THE  COST  OF  LIVING 

1906,  to  $898  in  1912.  Incidentally,  the  total  value  of 
all  improvements  in  1912  was  only  two  billion,  seven 
hundred  and  sixteen  millions,  or  about  three- fifths  of 
the  total  land  value. 

The  boroughs  separately  show  a  considerable  diver- 
gence in  the  ratio  of  increase.  In  the  Borough  of 
Manhattan,  for  example,  the  increase  in  the  value  of 
the  land  between  1906  and  1912  was  from  $1196  per 
capita,  to  $1296  per  capita.  This  represents  a  total 
increase  in  laud  value  of  more  than  five  hundred  mil- 
lion dollars.  In  the  Borough  of  Bronx  the  per  capita 
land  value  fell  from  $771  to  $657.  This  decrease  was 
due  primarily  to  the  fact  that  during  these  six  years 
the  population  of  Bronx  was  almost  doubled.  For 
this  borough,  the  total  land  value  increased  sixty  per 
cent.  For  the  Borough  of  Brooklyn,  the  per  capita 
valuation  rose  from  $325  to  $450.  The  population  in- 
creased less  than  twenty  per  cent. ,  and  the  land  value 
rose  from  456  millions  to  786  millions.  The  Borough 
of  Queens,  which  is  the  least  developed  borough  in 
Greater  New  York,  shows  an  increase  in  per  capita 
laud  value  from  $338  to  $862  ;  an  increase  of  sixty  per 
cent,  in  population  and  an  increase  in  the  total  land 
value  from  81  millions  to  278  millions.  The  increase 
in  the  Borough  of  Eichmond  is  very  similar  to  that  in 
Brooklyn. 

Although  the  land  valuations  in  New  York  extend 
over  only  six  years,  they  show  that  during  that  time 
the  total  increase  in  the  value  of  the  city's  laud  was 
about  forty  per  cent.,  while  in  the  newer  sections  of 
the  city,  notably  in  the  Bronx  and  in  Queens  Borough 
the  increase  was  about  sixty  per  cent.  Neither  in 


their  totals  nor  in  the  proportions  do  these  increases 
compare  with  the  increase  in  timber  land  value  or  in 
farm  land  values. 

The  land  of  Boston  has  been  assessed  separately  from 
the  improvements,  at  "the  full  and  fair  cash  valua- 
tion." There  has  been  no  material  addition  to  the 
area  of  the  city  of  Boston  during  this  time ;  in  fact, 
the  number  of  square  feet  of  land  taxed  decreased  from 
eight  hundred  and  ninety-six  million  in  1876  to  eight 
hundred  and  fifteen  million  in  1912.  This  decrease 
was  due  to  the  taking  of  land  for  streets  and  other 
public  purposes.  It  is  interesting  to  note  in  this  con- 
nection that  between  1896  and  191 1  two  of  the  twenty- 
five  wards  in  Boston  show  a  decrease  in  laud  value  ; 
one  shows  an  increase  of  one  hundred  dollars  ;  one 
shows  an  increase  of  twelve  thousand  dollars ;  while 
twenty  show  increases  varying  from  one  million  to 
twenty  millions  of  dollars.1 

The  value  of  all  laud  in  Boston  between  1887  and  1911 
has  increased  steadily.2  There  is  no  year  during  the 
period  that  shows  a  decrease.  In  1887,  the  land  valu- 
ation was  322  millions.  For  the  next  two  decades  it 
was, — 

1890 $365,548,000 

1895.    .....    443,695,000 

1900 523,934,000 

1905 618,642,000 

1910 672,100,000 

1911 685,484,000 

1  Annual  Report  of  the  Assessing  Department  for  the  Year  1911, 
City  of  Boston,  Printing  Department,  1912,  p.  46. 

2  Supra,  p.  16. 


190       KEDUCING  THE  COST  OF  LIVING 

Twenty-four  years  show  a  total  increase  of  slightly 
more  than  100  per  cent. 

The  laud  values  of  Boston  are  therefore  increasing  at 
less  than  a  quarter  of  the  rate  of  those  of  New  York. 
During  the  years  for  which  comparison  may  be  made 
(1906-1911),  the  laud  values  of  New  York  rose  thirty- 
eight  per  cent.,  while  those  of  Boston  rose  less  than 
eight  per  cent.  There  are  several  cities, — Trenton  and 
Newark  in  the  East,  and  Milwaukee,  Dallas,  Houston 
and  Seattle  in  the  West, — for  which  laud  assessments 
are  available.  The  land  increase  for  the  Eastern  cities 
and  in  Milwaukee  is  at  about  the  rate  of  Boston.  For 
the  Western  cities  it  is  more  rapid,  although  it  does  not 
compare  in  rapidity  with  the  increase  in  timber  and 
farm,  land  values.1 

City  land  values  are  increasing, — slowly  in  the  East, 
more  rapidly  in  the  West.  Each  decade  sees  from 
twenty  to  one  or  two  hundred  per  cent,  added  to  the 
value.  Much  has  been  said  and  written  regarding  this 
increase  in  city  land  values.  It  is  insignificant  when 
compared  with  some  of  the  increases  in  farm  laud  val- 
ues. Compare,  for  example,  the  increase  in  the  land 
values  of  New  York  City  with  the  increasing  laud  val- 
ues of  the  grain  states  of  the  West  North  Central 
group.  The  population  of  New  York  City  is  just  under 
five  million ;  of  Iowa,  North  Dakota,  South  Dakota, 
Nebraska,  and  Kansas  the  total  rural  population  is  al- 
most exactly  the  same  as  the  population  of  New  York 
City.  During  the  years  for  which  figures  are  available 
(1906-1912)  the  land  values  of  New  York  rose  from 
$3,367,000,000  to  $4, 563, 000, 000, —an  increase  of  almost 
1  See  Appendix  K. 


THE  INCREASE  IN  LAND  VALUES      191 

exactly  one-third  in  six  and  one-half  years.  The  total 
value  of  the  farm  lauds  (irrespective  of  improvements) 
in  the  states  named  was,  in  1910,  seven  and  a  half 
billions  of  dollars.  In  1900,  this  same  land  had  been 
valued  at  two  and  a  half  billions.  In  the  interval  of 
ten  years  it  had  increased  almost  exactly  five  billions 
of  dollars  (about  200  per  cent.).  The  total  value  of 
farm  lands  in  those  five  states  is  now  one  and  a  half 
times  the  total  value  of  land  in  New  York  City,  and 
the  rate  of  increase  in  the  value  of  the  laud  is  four  times 
the  rate  of  increase  in  New  York  City. 

Furthermore,  New  York  represents  the  exception. 
The  land  values  in  most  Eastern  cities  do  not  increase 
so  rapidly.  In  Boston  where  land  and  improvements 
have  been  separately  assessed  since  1887,  the  land  has 
increased  a  bare  one  hundred  per  cent,  in  twenty-five 
years.  Two  other  Eastern  cities,  which  have  separate 
assessments  of  laud  and  improvements,  report  increases 
of  (Trenton  1906-1912)  eight  per  cent,  and  Newark 
(1907-1912)  fifteen  per  cent.  Even  the  rapidly  grow- 
ing Western  cities  like  Seattle,  Houston  and  Galveston 
report  increases  in  the  assessment  of  laud  values  of  not 
over  two  or  three-fold  per  decade. 

9.  INCREASING  LAND  VALUES  AND  RISING  PRICES 
The  increase  in  the  land  values  throughout  the  entire 
United  States  has  been  immense  during  recent  years. 
Particularly  since  1896  timber  and  farm  land  values 
have  advanced  rapidly.  City  laud  values,  though  less 
rapidly,  have  risen  none  the  less  surely.  What  the 
future  may  hold  in  store  for  a  nation  whose  timber 
lands  treble,  and  whose  farm  lands  double,  in  value, 


192       BEDUCING  THE  COST  OF  LIVING 

during  a  single  decade,  the  student  of  statistics  may 
not  venture  to  prophesy.  Whatever  the  influence  of 
land  values  in  the  prices  of  products  derived  directly 
from  the  land,  and  it  seems  incontrovertible  that  some 
such  relation  exists,  the  past  few  years  have  witnessed 
an  increase  in  land  values  of  stupendous  proportions 
— an  increase  that  may  well  be  a  noteworthy  expla- 
nation of  the  increasing  cost  of  living. 


XV 
THE  INCEEASE  IN  LABOE  COSTS 

1.    HAVE  LABOR  COSTS  INCREASED  ? 

A  GENERAL,  impression  prevails  among  the  employ- 
ers of  the  community  that  an  increase  in  prices  must 
necessarily  result  from  the  rapid  increase  In  labor  costs 
during  the  past  few  years.  The  frequency  of  labor 
union  demands  has  confirmed  the  general  impression 
that  the  wage  rates  paid  to  labor  are  increasing  phe- 
nomenally. One  of  the  reasons  most  commonly  given 
for  an  increase  in  the  price  of  a  commodity  is  that  since 
wages  have  been  forced  up,  therefore  there  must  be  a 
corresponding  rise  in  prices.  All  of  these  view-points 
are  emphasized  in  the  wide-spread  discussion  of  the  in- 
crease in  wages. 

An  attempt  to  discover  the  extent  to  which  wage  in- 
creases are  responsible  for  the  increase  of  prices  should 
be  based  upon  a  recognition  of  the  fact  that  the  wages 
of  labor  and  the  labor  cost  of  a  product  do  not  neces- 
sarily vary  in  the  same  ratio. 

Indeed,  it  must  be  remembered  that  improved 
methods  of  manufacture  often  reduce  the  labor 
cost  while  wages  are  rising ;  on  the  other  hand, 
the  payment  of  higher  wages  and  procuring  higher 
grade  help  may  have  an  equally  potent  effect 


194      BEDUCING  THE  COST  OF  LIVING 

in  lowering  the  labor  cost  per  unit  of  product.1  The 
shoe  manufacturer  is  not  necessarily  justified  in  assert- 
ing that  an  increase  in  the  rate  of  wages  is  good  cause 
for  an  increase  of  price.  Neither  is  the  textile  manu- 
facturer justified  in  reducing  wages  on  the  ground  that 
prices  have  been  lowered.  In  either  instance  there 
may  be  some  corresponding  improvement  in  methods 
of  production  which  will  offset  the  increasing  compen- 
sation to  labor  or  the  diminishing  price.  To  be  sure, 
an  increase  in  wages  may  increase  the  labor  cost  per 
unit  of  product.  The  fact,  however,  does  not  neces- 
sarily follow. 

Available  statistics  do  not  permit  of  any  statement 
regarding  the  increase  or  the  decrease  in  the  labor 
cost  per  unit  of  product,  except  in  the  cases  of  anthra- 
cite coal  and  railroad  transportation.  The  coming 
decade  will  doubtless  see  a  considerable  collection  of 
such  material.  At  present,  the  most  that  can  fairly 
be  done  is  to  analyze  the  increase  in  wages,  taking  it 
for  granted  that  this  increase  in  wages  is  the  cause 
of  some  corresponding  increase  in  prices. 

The  available  figures  showing  wage  increases  are 
meager  in  the  last  degree,  and  in  most  cases  so  unsat- 
isfactory in  form  as  to  warrant  the  greatest  care  in 
their  nse.  Nevertheless,  it  is  possible  to  derive  from 
these  facts  some  general  statements  which  give  an  idea 
of  the  tendency  of  wage  rates. 

2.    THE  WAGES  OF  AGRICULTURAL  LABOR 
The  wages    of   agricultural    labor    have    shown  a 
marked  tendency  to  increase  during  the  past  twenty 
1  See  Appendix  F. 


THE  INCREASE  IN  LABOR  COSTS       195 

years.  A  recent  bulletin  on  tbe  wages  of  farm  labor ' 
contains  a  summary  of  the  results  derived  in  nineteen 
different  Federal  investigations  extending  from  1866 
to  1909.  For  the  United  States  as  a  whole,  the  wage 
rates  of  outdoor  farm  labor  by  the  day  in  harvest 
work  have  increased  from  $1.34  in  1866,  to  $1.71  in 
1909,  an  increase  of  approximately  one-third.  The 
same  rate  of  increase  is  shown  in  the  wages  of  outdoor 
labor  with  board,  the  daily  pay  increasing  from  $1.04 
to  $1.43.  With  the  exception  of  the  Western  States, 
this  increase  in  wages  has  been  rather  general.  In  the 
West,  however,  there  has  been  no  increase  in  the 
wages  of  farm  labor  since  1866.  In  fact,  the  wages 
of  day  labor  in  harvest  work,  without  board,  were 
$2.51  in  1866,  and  $2.51  in  1909. 

In  the  meantime,  there  were  large  wage  fluctuations. 
For  example,  in  almost  all  instances  of  which  the 
bulletin  gives  record,  there  was  a  sharp  decline  in 
wages  centering  around  the  years  1893,  1894,  and 
1895  ;  so  that  a  comparison  between  the  monthly  rate 
in  hiring  by  the  year  from  1891  to  1909  shows  a  gen- 
eral increase  of  approximately  thirty  per  cent,  in  the 
United  States  as  a  whole,  of  forty  per  cent,  in  the 
South  Atlantic  States,  and  of  thirty-five  per  cent,  in 
the  Western  States.  A  careful  reading  of  the  bulletin 
leads  to  the  conclusion  that  the  wages  of  farm  labor 
vary  greatly  with  the  conditions  of  prosperity  or  ad- 
versity (the  depressions  of  1873  and  1893  both  have 
had  a  marked  effect  in  reducing  farm  labor  wages); 
that  between  1866  and  1909  there  was  a  wage  increase 

1  United  States  Department  of  Agriculture,  Bureau  of  Statistics, 
Bulletin  99,  Washington,  Gov't  Printing  Office,  1912. 


196       REDUCING  THE  COST  OF  LIVING 

of  approximately  a  third  in  the  wages  of  farm  labor, 
varying  somewhat  in  different  sections  of  the  United 
States,  and  reaching  the  zero  point  in  the  Western 
States. 

A  comparison  of  the  wages  paid  to  farm  labor  dur- 
ing the  last  two  decades  shows  that  the  increase  of 
wages  is  equal  to  from  thirty  to  fifty  per  cent.,  de- 
pending upon  the  state  and  the  form  of  labor,  and 
centering  at  about  forty  per  cent.  In  so  far,  there- 
fore, as  labor  cost  is  an  item  in  fixing  the  price  of  farm 
products,  the  American  farmer  is  compelled  to  pay 
about  two- fifths  more  for  labor  now  than  he  was  forced 
to  pay  in  1890. 

3.    RAILROAD  WAGES 

The  wage  figures  for  industry  are  neither  so  com- 
plete nor  so  satisfactory  as  those  for  agriculture. 
They  are  perhaps  most  adequate  in  the  railroad  in- 
dustry. A  recent  controversy  between  the  Eastern 
railroads  and  the  Brotherhood  of  Locomotive  Engi- 
neers resulted  in  the  compilation  of  a  large  amount 
of  data  by  the  Board  of  Arbitration,  of  which  Charles 
E.  Van  Hise,  of  the  University  of  Wisconsin,  was 
chairman.1  From  the  figures  compiled  in  this  report, 
based  wholly  on  the  statistics  of  railways  in  the  United 
States  published  by  the  Interstate  Commerce  Commis- 
sion, it  appears  that  there  has  been  a  steady  increase 
in  the  average  daily  compensation  of  engineers,  fire- 
men, conductors,  and  other  trainmen.  Between  the 

1  Report  of  the  Board  of  Arbitration  appointed  in  conformity 
•with  an  agreement  of  the  parties,  published  by  the  Secretary,  No- 
vember 2,  1912. 


THE  INCREASE  IN  LABOR  COSTS       197 

years  1897  and  1911  this  increase  was  remarkably  uni- 
form, and  amounted  to  approximately  thirty  per  cent. 
An  appeal  to  the  reports  of  the  Interstate  Commerce 
Commission  shows  that  this  wage  increase  has  occurred 
not  only  in  the  case  of  the  trainmen,  but  of  practically 
all  other  employees,  with  the  exception  of  the  common 
laborers.  In  some  cases,  as,  for  instance,  of  the  ma- 
chinists, it  has  been  slightly  greater.  In  other  cases, 
as,  for  example,  of  the  shop  men,  it  has  been  slightly 
less.  In  general,  however,  it  seems  fair  to  say  that 
the  increase  in  railroad  wages  during  the  fifteen  years 
between  1897  and  1912  was  between  a  fifth  and  a  third. 
When  this  statement  is  made  it  should  be  borne  in 
mind  that  a  very  large  percentage  of  the  railroad  em- 
ployees (from  one-fourth  to  one-fifth)  are  included  in 
the  groups  of  common  labor,  for  which  the  wage  in- 
crease has  been  very  slight. 

4.  WAGES  IN  THE  ANTHRACITE  COAL  INDUSTRY 
Another  special  study  recently  completed  of  the 
wages  in  the  hard  coal  industry l  shows  that  between 
1902  and  1912  under  a  sliding  scale  agreement  the 
miners  received  an  increase  in  wage  over  the  price 
agreed  upon  for  1902  of  4. 2  percent.  This  period  is 
plainly  too  short  to  permit  of  any  adequate  deductions 
regarding  the  wages  of  hard  coal  miners.  .  Nor  do  any 
of  the  government  publications  on  the  subject  afford 
adequate  statistics  for  comparison. 
There  seems  to  have  been  during  the  past  two  dec- 

1  Increase  in  the  Price  of  Anthracite  Coal,  prepared  under  the 
direction  of  the  Commissioner  of  Labor,  Washington,  Government 
Print,  1913. 


198       REDUCING  THE  COST  OF  LIVING 

ades,  in  the  manufacturing  industries  of  the  United 
States,  a  somewhat  marked  tendency  toward  au  in- 
crease in  wages.  In  Massachusetts,  for  example, 
where  excellent  statistics  are  compiled,  it  is  possible 
to  obtain  statements  of  the  average  annual  earnings  of 
employees  in  the  various  industries  between  1886  and 
1912.  Although  there  is  a  considerable  diversity  in 
the  ratio  of  increase,  it  is  fair  to  assert  that  annual 
earnings  advanced  between  1886  and  1910  from  twenty 
to  thirty  per  cent.  In  the  boot  and  shoe  industry,  for 
example,  the  annual  earnings  for  1886  were  $503.48 ; 
for  1910,  $586.64  ;  in  the  cotton  industry  the  earnings 
for  the  respective  years  were  $307.66  and  $412.09; 
while  in  the  manufacture  of  rubber  and  elastic  goods 
the  earnings  increased  from  $389.55  to  $544.62.  The 
boot  and  shoe  industry  and  the  cotton  goods  industry, 
it  must  be  borne  in  mind,  are  the  two  Massachu- 
setts industries  employing  the  largest  numbers  of  per- 
sons. 

The  statistics  of  classified  weekly  earnings  published 
in  Massachusetts  between  1903  and  1912  show  a  similar 
upward  tendency,  which  is  approximately  the  same 
as  that  shown  in  the  classified  weekly  earnings  of  New 
Jersey,  for  which  statistics  are  available  between  1898 
and  1912. 

The  statistics  of  average  weekly  earnings  for  New 
Jersey  between  1897  and  1912  correspond  rather  closely 
with  those  for  Massachusetts.  In  the  woolen  and 
worsted  industry,  for  example,  the  increase  in  earnings 
is  equivalent  to  twenty-five  per  cent.  ;  in  the  silk  in- 
dustry it  is  practically  nil ;  in  the  manufacture  of 
machinery  it  is  equivalent  to  ten  per  cent.  ;  while  for 


THE  INCREASE  IN  LABOR  COSTS       199 

all  of  the  industries  of  New  Jersey  combined  it  amounts 
to  approximately  twenty-five  per  cent. 

Manufacturing  industries,  wherever  statistics  are 
available,  show  a  fairly  uniform  ratio  of  advance  in 
wages  during  the  past  twenty  years.  There  are  a  few 
industries  in  which  the  rate  has  advanced  little,  if  at 
all ;  there  are  a  handful  of  industries  in  which  it  has 
decreased,  but  in  most  industries  it  shows  an  increase 
of  between  a  fifth  and  a  third.  From  twenty  to  thirty- 
five  per  cent,  represents,  largely,  the  ratio  of  wage 
advances  in  manufacturing  between  1890  and  1911. 

A  report  recently  issued  by  a  Senate  Committee l  deals 
at  some  length  with  the  wages  in  the  building  trades 
between  1902  and  1910.  These  wage  figures,  derived 
primarily  from  the  employers  in  the  largest  cities  of 
the  country,  show  an  increase  in  most  of  the  building 
trades  not  exceeding  twenty-five  per  cent.,  although  in 
some  cases,  as,  for  instance,  the  plumbers  and  steam 
fitters,  the  rate  of  increase  is  thirty-five  per  cent.  In  a 
few  rare  instances  among  some  of  the  metal  workers  it 
rises  to  sixty  per  cent.  Although  this  statistical 
material  is  not  in  any  sense  authentic,  it  is  worthy  of 
notice,  in  view  of  the  fact  that  it  corresponds  accurately 
with  similar  statistics  compiled  by  the  United  States 
Bureau  of  Labor. 

6.    A  SUMMARY  OF  WAGE  INCREASE 
The  part  which  wage  increases  are  playing  in  forcing 
up  the  cost  of  living  seems  rather  clear  so  far  as  the 

1  Report  of  the  Select  Committee  on  Wages  and  Prices  of  Com- 
modities, Senate  Rep.  912,  61st  Congress,  2d  Session,  Washington, 
Government  Print,  1910. 


200       REDUCING  THE  COST  OF  LIVING 

wage  rates  are  concerned.  In  agriculture,  the  past 
twenty  years  has  seen  an  increase  of  approximately  a 
third  in  the  wage  rates  of  labor  ;  in  railroading  wage 
rates  have  increased  perhaps  a  quarter ;  while  in 
manufacturing  industries  the  adequate  facts  which 
come  to  hand  indicate  that  the  increase  in  wages  has 
been  from  a  quarter  to  a  fifth.1  Since  these  are  general 
statements,  they  of  course  involve  many  exceptions. 
Nevertheless,  a  frank  survey  of  the  figures  thus  far 
collected  suggests  that  the  increase  in  wages  is  con- 
siderably less  than  the  increase  in  the  prices  of  many 
food  products. 

A  consideration  of  the  wage-price  changes  during 
the  past  twenty  years  bears  out  the  suggestion  that 
"  the  advance  of  wages  set  in  long  after  the  increase  of 
prices "  and  that  "the  wage  advance  appeared  in  the 
wake  of  the  price  increase  as  a  consequence  or  offset, 
rather  than  as  a  primary  cause.  .  .  .  The  increase 
of  wages  .  .  .  has  come  about  as  effect,  result  or 
consequence  of  the  upward  movement  of  prices."  2 
Although  the  producer  may  find  that  in  1914  his  labor 
costs  are  higher  than  they  were  in  1895,  the  fact  remains 
that  the  increase  in  labor  costs  has  followed,  rather 
than  preceded,  the  rise  in  living  costs.  It  is  primarily 
a  result,  not  a  cause,  of  the  increasing  cost  of  living. 

1  This  statement  applies  to  labor  as  an  element  in  production 
costs,  rather  than  to  the  wages  of  laborers. 

2  Massachusetts  Commission  on  the  Cost  of  Living,  Op.  Cit., 
p.  472. 


XVI 
FACING  THE  ISSUE 

1.  THE  COMPLEXITY  OF  FORCES 
THEBE  are  two  distinct  phases  of  the  cost  of  living 
problem  which  must  be  separately  considered  aud 
dealt  with.  On  the  one  hand,  the  standard  of  living 
is  increasing.  On  the  other  hand,  prices  are  increas- 
ing. Each  issue  presents  manifold  complexities. 

The  rising  standard  of  life  is  a  part  of  the  nineteenth 
century  transformation  of  Western  civilization  from 
the  life  of  the  agricultural  village  to  the  life  of  the 
industrial  city.  What  the  final  result  of  thischange  may 
be,  no  man  can  say.  Thus  far  there  has  followed  in  its 
wake  a  reorganization  in  family  life,  and  in  the  mode 
of  living  which  has  placed  families,  as  never  before,  at 
the  mercy  of  prices  and  price  changes. 

The  well-to-do  have  pushed  their  standard  of  living 
forward  with  urgent  rapidity.  Competition  between 
neighbors  has  elevated  the  number  of  goods  which 
makes  up  a  "  good  living  "  farther  and  farther  beyond 
the  reach  of  the  low  income  man.  Still,  the  well-to- 
do  form  but  a  small  proportion  of  the  total  population. 
The  great  mass  of  people  are  agitated  little  or  not  at  all 
over  the  luxuries  of  life.  Their  prime  concern  is  with 
life's  necessities,  and  with  a  few  of  its  comforts. 


202       KEDUCING  THE  COST  OF  LIVING 

The  increase  in  prices  has  been  rather  general  and 
very  irregular.  The  prices  of  some  commodities  have 
risen  with  great  rapidity.  In  other  cases  the  price 
advance  has  been  slow.  In  still  other  instances  there 
have  been  price  decreases.  The  general  movement  of 
prices  is,  however,  undoubtedly  upward. 

2.  THE  FACTORS  IN  EISING  PRICES 
Price  increases  are  apparently  due  to  a  number  of 
significant  economic  forces.  The  most  fundamental  of 
these,  perhaps,  and  certainly  the  most  far-reaching, 
is  the  increase  in  land  values,  involving,  as  it  does,  an 
increase  in  the  value  of  all  raw  materials  derived 
directly  or  indirectly  from  the  land.  All  of  the 
available  facts  relating  to  the  value  of  city  land,  of 
timber  land,  and  of  agricultural  land,  lead  to  a  uniform 
conclusion,  namely,  that  during  the  last  two  decades 
land  values  in  the  United  States  have  increased  at  a 
rate  that  is  beyond  the  grasp  of  everything  except 
statistical  computations.  Had  the  actual  cost  of  living 
during  the  past  ten  years  increased  as  rapidly  as  the 
value  of  agricultural  land  and  timber  land,  almost 
everything  which  the  consumer  now  demands  would 
sell  for  two  or  three  times  its  present  price. 

The  failure  in  the  supply  of  certain  kinds  of  food, 
notably  of  meat  products,  is  only  less  significant  than 
the  increase  in  laud  values.  The  population  of  the 
United  States  is  increasing  rapidly  both  by  birth  and 
by  immigration.  Meat  products,  which  constitute  the 
largest  single  element  in  the  diet  of  the  ordinary  fam- 
ily, show  an  alarming  tendency  toward  price  increase. 
The  explanation  is  simple.  The  animals  from  which 


FACING  THE  ISSUE  203 

these  products  are  derived  are  decreasing  or  else  in- 
creasing in  number  less  rapidly  than  the  population. 
The  inevitable  result  is  increased  price. 

During  the  past  twenty  years  there  has  been  a  gen- 
eral increase  in  the  wages  paid  to  labor.  To  be  sure, 
some  wages  have  actually  decreased,  but  in  the  major- 
ity of  industries  an  increase  is  reported,  although 
this  increase  varies  considerably.  In  a  large  propor- 
tion of  the  instances  this  wage  increase  is  not  so  great 
as  the  increase  in  the  prices  which  the  laborer  is  forced 
to  pay  for  his  food  supply.  Still  any  increase  in 
wages  must  be  considered  as  an  element  in  determining 
the  price  of  that  product  which  the  laborer  assists  in 
producing.  On  the  other  hand,  the  fact  should  always 
be  borne  in  mind  that  wage  increases  dragged  consider- 
ably behind  the  increase  in  prices,  and  came  finally  as 
a  consequence  of,  rather  than  a  cause  of,  price  ad- 
vance. 

Many  raw  materials  have  actually  decreased  in 
price.  Taking  all  raw  products  for  which  price  figures 
are  available,  the  number  showing  decreases  in  price 
is  only  a  small  fraction  of  the  number  showing  in- 
creases. However,  in  a  large  proportion  of  the  cases, 
these  increases  between  1890  and  1911  are  less  than 
twenty-five  per  cent.  The  raw  materials  showing  the 
sharpest  price  advances  are  agricultural  products, 
timber  products,  and  some  minerals. 

The  increase  in  the  gold  supply  has  tended  automat- 
ically to  increase  prices.  So  long  as  one  commodity  is 
used  as  a  value  standard,  and  exchanged  for  all  other 
commodities,  an  increase  in  the  amount  of  that  stand- 
ard commodity  necessarily  decreases  its  value  when 


204       EBDUCING  THE  COST  OF  LIVING 

it  is  compared  with  the  other  commodities.  That  the 
increasing  gold  supply  is  an  element  in  price  increase 
goes  almost  without  saying.  That  it  is  the  only  ele- 
ment, or  that  it  is  even  a  determining  element,  the 
available  facts  do  not  show. 

The  world  has  attempted  to  personalize  the  blame 
for  the  rising  cost  of  living.  The  housewife  looks  to 
her  grocer  as  the  cause  of  high  living  costs ;  the  grocer 
points  to  the  middleman  ;  the  middleman  indicates 
the  producer, — the  manufacturer,  miner,  or  farmer  ; 
the  producer  in  turn  points  to  the  increase  of  land 
values,  the  increase  in  the  cost  of  labor,  the  increase 
in  the  supply  of  gold,  and  the  diminishing  supply 
of  certain  raw  products  from  which  his  goods  are 
made.  A  study  of  the  fact  shows  clearly  that  the 
blame  for  increasing  prices  cannot  be  laid  to  the 
charge  of  any  one  individual  or  group  of  individuals. 
The  rising  cost  of  living  is  a  modern  economic  phe- 
nomenon. 

This  is  not  of  course  the  whole  story.  In  many 
cases  the  producer  has  taken  advantage  of  real  or  arti- 
ficial decrease  in  supply  to  exact  monopoly  prices.  In 
many  cases  he  has  over-capitalized  the  values  of  land 
and  of  raw  materials,  and  has  then  earned  dividends 
on  his  over-capitalization.  Then,  too,  there  are  many 
industries  in  which  the  invention  of  improved  ma- 
chinery has  so  reduced  the  cost  of  production  as  to 
offset  the  increase  in  rent  and  wages.  On  the  whole, 
it  is  probably  true  that  most  producers  now  face 
higher  production  costs  than  at  any  period  since  1896. 
The  extent  of  the  increase  varies  ;  the  fact  remains 
almost  universal. 


FACING  THE  ISSUE  205 

3.    MAY  THE  RISE  IN  THE  COST  OF  LIVING  BE 
CHECKED  ? 

May  the  rise  in  the  cost  of  living  be  checked! 
Is  it  possible  by  individual  or  cooperative  action 
to  stay  the  speed  of  rising  standards  or  rising 
prices  ? 

There  is  no  real  need  to  check  rising  standards,  pro- 
vided that  they  include  the  many,  as  well  as  the  few ; 
provided  there  is  no  encroachment  upon  the  stored  up 
wealth  of  society  and  provided  the  increase  does  not 
involve  a  philosophy  which  puts  the  ownership  of 
economic  goods  before  all  other  things  in  life.  The 
individual  must  find  salvation  from  an  exacting  stand- 
ard of  achievement  in  a  reconstructed  philosophy  that 
will  make  him  the  master,  and  not  the  slave  of  the 
things  which  he  possesses. 

The  real  interest  centers  around  the  prices  of  com- 
modities. Price  increases,  particularly  those  great  in- 
creases which  have  recently  occurred  in  the  prices  of 
the  necessaries  of  life,  modify  the  economic  position  of 
the  throng  of  people  who  live  on  small  incomes. 
There  are  two  possibilities  in  price  modification. 
The  prices  can  be  reduced,  or  an  increased  amount  of 
service  may  be  rendered  at  the  same  price.  Through 
either  of  these  means,  the  low  income  portion  of  the 
population  may  hope  to  hold  its  own  against  the  tide 
of  rising  living  costs.  There  are  some  means  by 
virtue  of  which  price  increases  may  be  checked. 
There  are  other  means  by  which  price  increases  may 
be  counteracted  or  offset.  Both  subjects  must  be  care- 
fully analyzed  before  the  means  of  price  reduction  are 
mastered  and  applied. 


206       KEDUCING  THE  COST  OF  LIVING 

4.     CIVILIZATION  A  CONQUEST  OF  DIFFICULTIES 

The  cost  of  living  problem  presents  some  ugly 
aspects.  There  are  in  it  some  difficulties  which,  on 
their  face,  appear  insurmountable.  Nevertheless,  the 
issue  must  be  met  and  solved.  It  is  one  of  the  vital 
questions  involved  in  a  changing  civilization.  Civili- 
zation is  built  upon  the  conquest  of  difficulties.  Ne- 
cessity has  taken  a  proverbial  place  as  the  mother  of 
invention.  What  men  have  been  forced  to  do,  they 
have  accomplished  in  a  long  process  of  adjustment  be- 
tween man  and  his  environment. 

Civilization  is  now  in  the  throes  of  a  transforma- 
tion as  profound  as  any  that  has  occurred  in  preced- 
ing epochs.  Like  all  changes,  this  one  carries  in  its 
train  a  multiplicity  of  complications  against  which 
society  must  contend. 

The  Western  world  will  solve  the  problem  of  the  in- 
creasing cost  of  living,  or  else  the  increasing  cost  of 
living  will  wreck  the  Western  world.  No  society  can 
endure  in  which  the  cost  of  the  necessaries  of  life  is 
rising  faster  than  the  incomes  with  which  the  great 
majority  of  the  population  secure  those  necessaries. 
Such  a  process,  long  enough  continued,  leads  inevi- 
tably to  individual  and  social  bankruptcy. 

5.    FRAMING  A  SOLUTION 

There  are  certain  principles  that  must  guide  what- 
ever action  is  taken  by  society  in  its  effort  to  meet  the 
increasing  cost  of  living.  In  the  first  place,  wherever 
such  a  thing  is  possible,  the  work  should  be  left  to 
local  authority.  It  is  unnecessary,  for  instance,  that 


FACING  THE  ISSUE  207 

retail  markets  be  established  by  state  agency.  State 
encouragement  there  should  be,  but  the  actual  work  of 
administrating  municipal  markets  must  be  undertaken 
by  the  municipalities  themselves.  On  the  other  hand, 
in  all  cases  where  the  point  at  issue  is  of  more  than 
local  importance,  it  is  the  sheerest  folly  for  local 
authorities  to  attempt  to  cope  with  the  problem. 
Such  an  issue  as  the  taxation  of  farm  land  values,  for 
instance,  must  be  met  by  the  state.  Even  were  ifc 
legally  possible  for  the  local  authorities  to  cope  with 
such  situations,  practically  they  must  of  necessity  fai  1 
to  do  so  because  of  the  conflict  of  local  interests.  No 
one  should  hesitate  about  turning  to  larger  govern- 
mental authority  in  cases  where  the  smaller  has  failed 
of  its  purpose. 

Nor  is  it  desirable  that  the  country  should  rest 
peacefully  in  the  hope  that  one  single  act  of  the  national 
government  will  solve  the  problem  of  the  increasing 
cost  of  living.  In  many  quarters  there  is  a  strong 
tendency  to  believe  that  a  chief  executive  at  Washing- 
ton will  by  a  single  stroke  of  genius  settle  the  cost  of 
living  issue  for  good.  Reduce  the  tariff,  cry  these 
line  of-least-resistance-devotees,  curb  the  trusts,  re- 
form the  currency,  and  the  work  is  done.  No  remedy 
could  be  easier  ;  none  more  futile.  The  problem  is 
too  many-sided  to  be  solved  in  any  such  offhand  man- 
ner. 

The  cost  of  living  problem,  nevertheless,  presses  for 
solution.  Every  element  in  society  feels  its  impact. 
Day  by  day  the  facts  concerning  it  are  being  brought 
to  light.  A  stage  has  been  reached  where  some  form 
of  action  is  necessary, — a  stage  which  demands  con- 


208       EEDUOING  THE  COST  OF  LIVING 

structive  scientific  thought.  If  the  issues  are  to  be 
successfully  met  the  facts  must  be  squarely  faced  ; 
each  city  and  state,  and  where  necessary,  the  national 
government,  must  adopt  a  program  for  reducing  living 
costs. 


XVII 

THE  SIMPLE  LIFE 
1. 


THE  complexities  of  the  cost  of  living  issue  do  not 
prevent  the  individual  from  playing  a  large  part  in  its 
reduction.  The  individual  cannot  control  prices.  He 
may,  however,  play  a  conspicuous  part  in  the  drama 
of  living  cost  reduction  by  simplifying  his  life,  cur- 
tailing his  wants,  serving  himself  wherever  possible, 
and  spending  the  income  which  he  receives  more  effi- 
ciently. This  is  not  the  remedy  for  the  increasing 
cost  of  living.  It  is  a  remedy,  though,  and  one  that 
may  be  applied  with  peculiar  advantage  by  the  well- 
to-do. 

The  well-to-do  have  been  led  by  a  will-o' -the  wisp 
called  "  the  possession  of  things."  "  Give  us  things," 
these  eager  ones  have  cried,  "and  we  shall  be  happy 
ever  after. " 

Some  of  the  well-to-do  have  entered  the  competition 
and  stayed  in  it.  They  are  still  struggling  madly  for 
the  possession  of  things — for  the  possession  of  more 
things  than  their  neighbors.  Others  have  dropped  out 
beaten,  embittered  by  their  defeat,  and  cursing  the 
hard  fate  which  has  compelled  them  to  leave  the  race. 
Still  others  are  in  the  lead.  They  have  more  than  any 


210       EEDUCING  THE  COST  OF  LIVING 

of  their  neighbors.  They  have  all  that  wants  can 
dictate,  or  that  money  can  purchase.  They  have  sur- 
rounded themselves  with  the  luxury  of  kings.  Do 
they  enjoy  it  ?  Certainly  not.  The  very  taste  of  it  is 
gall  and  wormwood  to  them.  Unless  they  have 
climbed  out  over  the  foot-hills  of  a  belief  in  salvation 
through  the  possession  of  things,  their  mouths  droop  ; 
their  digestion  fails  ;  their  lives  are  barren  ;  they  have 
enough.  For  such  the  simple  life  is  fraught  with  un- 
counted possibilities. 

2.  CAN  MEN  GET  BACK  TO  NATURE  t 
Sick  of  the  pursuit  after  riches  and  of  the  vapid  liv- 
ing of  the  well-to-do,  Eousseau  urged  men  to  go  back 
to  nature.  He  pictured  in  glowing  language  the  life 
of  the  savage.  Eousseau  assumed  that  the  savage  was 
virtuous,  noble  and  happy.  It  was  on  the  basis  of 
this  assumption  that  he  urged  Frenchmen  to  go  back 
to  nature.  Like  many  another  brilliant  writer,  Eous- 
seau built  his  dreams  on  a  misstatement  of  facts. 

The  studies  that  have  been  made  since  Eousseau' s 
time  prove  conclusively  that  the  savage  is  not  a  happy 
child  of  nature,  his  life  a  glad  song  of  thanksgiving 
and  praise  to  her.  Eather  it  is  fraught  with  uncer- 
tainties and  terrors.  The  savage  fears  the  lightning, 
the  comet,  the  storm.  He  sees  in  all  of  the  expres- 
sions of  nature's  power  an  effort  on  the  part  of  some 
god  to  strike  him  down.  He  shudders  and  hides  him- 
self from  that  very  Mother  Nature  which  civilization 
utilizes  to  such  manifold  advantage,  and  in  which  poet, 
philosopher,  and  scientist  find  such  material  for  study 
and  thought. 


THE  SIMPLE  LIFE  211 

Even  though  it  were  possible  for  mankind  to  throw 
aside  the  knowledge  which  civilization  has  accumu- 
lated, even  though  it  were  considered  desirable  to  go 
back  to  nature's  state,  the  thing  is  unthinkable.  Man- 
kind goes  in  only  one  direction, — forward.  He  goes 
forward  because  all  that  the  past  can  hold  is  less  to  his 
advantage  than  the  good  which  the  present  and  the 
future  afford. 

3.    COMPETITION  AND  BARBARISM 

Going  back  to  nature  is  equivalent  to  going  back  to 
competition.  Who  shall  cry,  after  contemplating  the 
fearful  struggle  of  nature, — "  Let  us  go  back  "  ? 

Living  in  a  state  of  nature,  man  competes  on  equal 
terms  with  the  animals.  The  lion  is  his  master.  The 
tiger  and  wild  boar  tear  him  to  pieces.  He  flees  from 
the  bear  and  from  the  wolves  that  cry  their  pack  yell. 
Natural  man  is  at  the  mercy  of  every  animal  that  is 
larger  and  stronger  than  he.  The  invention  of 
weapons  and  of  gunpowder  gives  man  a  monopoly  ad- 
vantage over  the  brute  creation. 

Living  in  a  state  of  nature,  man  was  continually 
competing  with  his  fellows.  If  a  choice  kill  fell  to 
his  luck,  he  fought  for  it.  If  a  neighboring  horde  or 
tribe  saw  in  the  land  which  he  held  a  chance  to  better 
its  lot,  there  was  a  battle,  or  a  series  of  battles,  until 
one  had  eliminated  the  other.  An  eye  was  taken 
for  an  eye,  a  tooth  for  a  tooth.  The  even-handed, 
competitive  justice  of  nature  knows  no  mercy.  The 
logic  of  her  decrees  is  unanswerable  and  frightful. 

Civilization  has  mitigated  nature's  justice.  Social 
justice  presupposes  a  touch  of  social  judgment  and 


212       EEDUCING  THE  COST  OF  LIVING 

human  reason.  An  eye  is  no  longer  exacted  for  an 
eye.  Personal  conflict  is  not  the  only  means  of  deter- 
mining personal  worth.  Civilization  has  mingled  with 
nature's  justice  a  show  of  human  reason  that  subli- 
mates it  and  renders  it  endurable. 

Living  in  a  state  of  nature  man  would  compete  with 
nature.  If  there  was  a  famine,  he  would  starve.  If 
there  was  a  flood  or  a  forest  fire  he  would  die.  The 
savage  lies  in  the  lap  of  his  iron  goddess,  and  accepts 
her  decrees  as  they  are  promulgated,  almost  without  a 
protest.  Civilization  does  not  fear  nature's  forces. 
They  provide  the  motive  power  by  which  the  car  of 
progress  is  driven. 

No  hope  lies  in  getting  back  to  nature.  There  are 
no  possibilities  in  the  restoration  of  competition.  The 
welfare  of  the  future  depends  upon  man's  ability  to 
continue  his  subjugation  of  nature.  Through  cooper- 
ation lies  the  true  path  of  progress. 

4.  EEDUCING  THE  DENOMINATOR 
The  numerator  of  a  man's  life  is  his  income.  The 
denominator  is  his  wants.  Men  may  not  go  back  to 
nature,  nevertheless  they  may  simplify  life.  Where 
the  numerator  is  greater  than  the  denominator,  when 
all  wants  are  supplied,  there  is  no  longer  any  unhap- 
piness  due  to  the  lack  of  things.  Where  the  wants  are 
more  than  the  income,  there  unhappiness  exists. 

There  are  two  possibilities  where  the  income  is  less 
than  the  wants.  The  income  may  be  increased,  or  the 
wants  may  be  diminished. 

The  well-to-do  have  sought  salvation  through  the 
increase  in  the  numerator.  By  fair  means  and  foul 


THE  SIMPLE  LIFE  213 

they  have  added  to  income.  How  little  have  they 
understood  that  wants  are  ineradicable  through  the 
increase  of  income  !  As  soon  as  one  want  is  satisfied 
two  appear  in  its  stead.  The  well-to-do  struggle  for 
satisfaction  has  been  a  struggle  to  increase  income. 
Its  only  hope  lies  in  a  reduction  of  wants.  The  income- 
over-wants  fraction  differs  from  all  the  other  fractions 
in  this  respect,  that  no  matter  how  fast  the  numerator 
is  increased,  up  to  a  certain  point,  the  denominator 
increases  quite  as  fast,  or  faster.  The  only  hope  of 
converting  it  into  a  whole  number  lies  for  most  men  in 
the  reduction  of  the  denominator. 

The  denominator  of  the  livelihood  problem  can  be 
reduced.  Wants  can  be  restricted  when  men  learn 
that  the  real  satisfactions  of  life  do  not  come  through 
the  possession  of  goods  at  all. 

The  wants  of  men  are  the  result  of  two  things. 
There  are  first  the  wants  for  the  necessaries  of  life. 
These  wants  are  natural.  Man  possesses  them  in  com- 
mon with  all  other  animals.  There  are  in  the  second 
place  wants  which  are  the  product  of  civilization  and 
its  teachings.  Patent  leather  on  shoes,  lace  on  dresses, 
neckties,  soft  draperies,  are  the  result  of  education, 
not  of  inherent  qualities.  The  natural  wants  must 
be  satisfied.  The  acquired  wants  may  be,  or  may  not 
be  satisfied,  as  a  man  insists,  or  does  not  insist,  on 
keeping  up  with  his  neighbors. 

When  the  time  comes  that  men  believe  in  them- 
selves rather  than  in  the  things  that  they  possess,  a 
long  stride  will  have  been  taken  toward  the  reduction 
of  the  denominator  of  wants.  So  long  as  men  believe 
in  salvation  through  the  possession  of  goods,  so  long 


214       REDUCING  THE  COST  OF  LIVING 

will  they  continue  to  suffer  from  that  misery  which 
failure  to  possess  some  coveted  object  can  alone 
produce. 

5.    HAPPINESS,  SATIETY,  AND  SATISFACTION 

The  salvation  of  those  among  the  well-to-do  who  put 
their  trust  in  the  possession  of  things  will  be  wrought 
when  they  understand  the  difference  between  hap- 
piness, satiety,  and  satisfaction.  Happiness  is  an 
ethereal  or  blissful  state  of  contentment,  or  even  of 
oblivion  of  material  conditions.  Satiety  is  the  feeling 
of  overmuchness  that  follows  surfeit.  Satisfaction  is 
the  feeling  of  completeness  which  is  the  result  of  work 
well  done. 

Men  postulate  happiness  as  the  goal  of  endeavor. 
They  hope  to  forget.  They  look  forward  to  a  mil- 
lennium in  which  mankind  shall  be  free  from  pain, 
shame,  and  sin. 

Rousseau's  philosophy  aimed  at  happiness.  Rous- 
seau  himself  revolted  against  the  excesses  and  the  crass 
material  life  of  the  well-to-do.  He  was  horrified  at 
the  privations  which  existed  among  those  whose  work 
supported  the  well-to-do.  The  whole  fabric  of  civili- 
zation seemed  to  him  a  tissue  of  lies  and  shame. 
Against  it  he  uttered  his  protest, — "  Back  to  nature." 
He  hoped  the  return  to  nature  would  be  a  return  to 
simplicity,  virtue,  and  peace.  He  did  not  understand 
that  nature,  red  in  tooth  and  claw,  was  forever  at  war. 
He  did  not  know  that  fear  and  lust  and  hate  stalked 
unhindered  through  every  primitive  society. 

Among  the  well-to-do  in  American  society  there  is  a 
voice  raised  here  and  there,  crying,  "  Back  to  nature." 


THE  SIMPLE  LIFE  215 

Men  leave  their  businesses  and  take  up  farms.  They 
go  from  the  city  to  the  mountains ;  yet  escape  is  almost 
impossible.  No  sooner  is  a  choice  spot  discovered 
than  some  enterprising  neighbor  erects  a  summer  hotel, 
inserts  an  advertisement  in  the  daily  papers,  and  sets 
up  a  mountain  city.  The  great  majority  of  the  well- 
to-do  seek  their  salvation  in  things.  They  pile  up 
income,  and  they  pile  up  goods  as  high  as  the  art  of 
man  will  reach.  When  they  have  finished,  they  turn 
away,  discouraged.  After  all,  it  is  but  dust  and  ashes 
in  their  hands.  They  have  encountered  the  monster 
Satiety,  which  lies  in  wait  for  every  one  who  seeks 
salvation  in  the  possession  of  many  things. 

There  are  those  who  seek  their  salvation  in  effort. 
Day  by  day  they  strive  to  achieve  that  upon  which 
they  have  set  their  hearts.  Day  by  day  a  little  is 
added  to  the  completed  whole,  until  at  length  their 
product  stands, — a  new  formula,  an  invention,  a  busi- 
ness, a  cathedral,  a  picture.  The  man  bows  his 
head,  heaves  a  great  sigh  of  satisfaction  and  goes 
about  his  further  business.  He  has  reaped  the  re- 
ward, even  though  it  be  but  a  partial  one,  of  his  en- 
deavors. 

Salvation  lies  in  doing,  which  is  another  term  for 
growing  or  unfolding.  Men  derive  the  greatest  beati- 
tudes from  a  life  of  achievement.  The  blessings  of 
the  world  are  showered  upon  the  head  of  him  who 
does  the  world's  work.  It  is  not  yet  time  to  sit  peace- 
fully down  and  wish  for  the  happiness  of  the  millen- 
nium. The  piling  up  of  things  yields  no  satisfaction. 
There  is  work  to  be  done.  Therein  lies  man's  satis- 
•  faction  and  his  glory. 


216       REDUCING  THE  COST  OF  LIVING 

6.    As  A  MAN  THINKETH 

The  simple  life  lies  in  the  pursuit  of  those  things 
which  are  worth  pursuing.  The  numerator  of  income 
cannot  be  raised  permanently  for  most  men.  The 
effort  directed  toward  raising  it  is  futility  itself. 
The  denominator  may  be  reduced  by  most  men,  if 
they  will  turn  their  eyes  forever  away  from  the  hope 
of  happiness  in  the  possession  of  things,  and  contem- 
plate the  possibilities  of  satisfaction  in  service  well 
rendered.  In  the  last  analysis,  there  lies  no  greater 
satisfaction,  and  no  nearer  hope  for  man's  salvation. 


XVIII 
BACK  TO  THE  LAND 

1.  EACH  MAN  His  OWN  SAVIOUB 

AN  individual  can  always  fight  the  rising  cost  of  liv- 
ing by  seeking  the  satisfactions  of  life  within  himself. 
The  work  of  the  world  is  to  be  done.  Its  battles  are  to 
be  fought.  Man  alone  can  gain  these  triumphs,  and 
only  through  consistent  effort. 

Each  person  may  play  a  part  in  reducing  the  cost  of 
living  by  decreasing  the  number  of  his  wants,  and  by 
seeking  for  satisfaction  rather  than  for  happiness. 
He  may  go  one  step  farther  and  adjust  the  proportions 
of  his  life  until  he  performs  many  of  life's  services  for 
himself.  Such  a  doctrine  obviously  applies  to  the  well- 
to-do.  It  is  idle  to  turn  to  the  needy  with  the  behest 
that  they  reduce  their  wants  or  perform  more  self- 
service.  Nevertheless,  it  remains  true  that  even  among 
the  needy  there  are  opportunities  for  self-service.  No 
one  phrase  so  well  expresses  the  demand  for  self-serv- 
ice as  the  phrase  "  back  to  the  land." 

2.  THE  MOVEMENT  TO  THE  LAND 

The  movement  to  the.  land  is,  in  its  essence,  a  protest 
against  the  intricacies  and  complex  relationships  of  a 
society  in  which  men  have  become  so  interdependent 


218       REDUCING  THE  COST  OF  LIVING 

that  they  feel  the  yolk  of  enforced  cooperation  pressing 
upon  them. 

The  city  dweller  is  confronted  by  fearful  odds.  He 
is  galled  by  the  restraints  of  a  position  which  scientific 
management  has  reduced  to  an  appalling  fineness  of 
specialized  certainty.  He  revolts  against  rising  stand- 
ards which  he  is  compelled  to  follow,  and  rising  prices 
which  he  pays  whenever  he  buys.  The  confining 
restraint  of  city  life  overwhelms  his  spirit,  giving 
him,  as  it  does,  the  sense  of  restraint  and  lack  of 
vision.  Against  these  coercive  forces  that  hedge  about 
the  freedom  of  the  city  man,  he  cries  out  in  vigorous 
protest.  By  way  of  ameliorating  his  lot,  he  turns  an 
eager  gaze  toward  the  country. 

"The  air  is  good,"  says  the  city  man.  "  The  life  is 
in  the  open.  Then,  best  of  all,  the  farmer  is  no  man's 
man.  He  is  free!" 

The  city  man  is  wrong,  of  course.  The  farmer  is 
tied  down  by  his  round  of  daily  chores,  and  restrained 
in  all  of  his  dealings  by  high  freight  rates,  and  the  im- 
possibility of  securing  a  reliable  labor  supply.  In  a 
large  sense,  however,  the  city  man  is  right.  The 
farmer  can,  if  he  will,  step  out  of  the  machine. 

A  well-run  farm  yields  a  rather  sure  and  a  fairly 
good  living.  There  is  always  food,  at  least,  and  it  is  a 
poor  farmer  who  cannot  produce  enough  to  buy  the 
other  necessaries  of  life.  As  for  the  comforts  and 
luxuries  they  are  found  everywhere  on  the  prosperous 
farms,  and  as  each  man  hopes  in  time  to  become  a 
prosperous  farmer,  their  possibilities  are  always  before 
him. 

The  agricultural  colleges  have  helped  in  the  move- 


BACK  TO  THE  LAND  219 

meiit  back  to  the  land.  They  have  proved  beyond 
cavil  that  a  man  trained  in  the  science  of  agriculture  is 
as  valuable,  to  himself  and  to  society,  as  a  man  trained 
in  the  science  of  engineering,  or  of  medicine.  Perhaps 
he  may  be  more  valuable  for  the  time  being,  because 
of  the  woeful  dearth  of  scientific  farmers.  The  agri- 
cultural college  has  thrown  the  cloak  of  culture  about 
the  most  ancient  of  man's  occupations,  lending  to  it  an 
air  of  respectability  that  makes  it  a  pursuit  possible 
and  desirable  even  from  a  social  standpoint. 

The  developments  of  modern  science  along  other 
lines  have  led  people  back  to  the  land.  Telephones, 
phonographs,  good  magazines,  home  conveniences, 
and  the  like,  have  placed  the  comforts  of  the  city 
dweller  within  the  reach  of  the  well-to-do  farmer. 

When  all  has  been  said,  two  things  stand  out 
prominently  in  rural  life.  Service  is  hard  to  secure. 
When  it  is  found,  it  is  likely  to  be  independent  and 
democratic.  Both  considerations  relieve  farm  life  of 
the  charge  of  increasing  the  cost  of  living  by  an  in- 
crease in  the  amount  of  service  demanded.  The  farm 
man  and  the  farm  woman  face  the  ever-recurring 
necessity  of  being  well  served  by  serving  themselves. 

Perhaps  the  chief  cause  of  satisfaction  that  men  and 
women  find  in  rural  life  is  freedom  from  servility  and 
independence  of  service.  The  city  housekeeper  is  tied 
down  by  her  servants.  The  rural  housekeeper  does 
her  own  work,  and  is  free  of  the  trying  pressure  which 
service  would  put  upon  her.  Back  to  the  land  means 
back  to  independence,  both  from  the  intense  machine 
pace  of  the  city  and  from  the  hopeless  burden  of  per- 
sonal service  with  which  the  city  man  is  loaded  down. 


220       EEDUCING  THE  COST  OF  LIVING 

3.    TRUCK-PATCH  OR  AUTOMOBILE  f 

The  man  who  remains  in  the  city  faces  a  very  real 
opportunity  to  reduce  living  costs  by  relying  on  his 
own  efforts  for  service,  and  by  taking  every  oppor- 
tunity to  serve  himself.  The  man  in  the  city  is  not 
necessarily  dependent  on  all  of  the  multitudinous  forms 
of  service  which  confront  him.  He  may  assert  his  in- 
dependence of  them  to  a  limited  degree. 

A  man  living  in  a  fine  suburb  had  a  truck -patch  in 
which  he  took  particular  pride.  His  patch  was  not 
large — it  covered  only  the  rear  end  of  a  suburban  lot ; 
but  it  was  well  cultivated  and  carefully  tended. 
Each  day  on  his  return  from  work,  and  each  Saturday 
afternoon,  and  sometimes  on  Sunday,  the  suburbanite 
worked  in  his  garden.  The  exercise  guaranteed  him 
health,  and  the  intelligent  direction  of  it  provided  the 
family  with  an  abundance  of  fresh  vegetables  in 
season. 

One  day  the  tempter  approached  the  suburbanite  in 
the  form  of  a  friend  who  had  an  automobile  agency. 
"  You  could  put  your  garage  back  there,"  the  friend 
explained,  with  a  motion  toward  the  back  of  the  lot. 

11  But  my  garden  ! "  the  suburbanite  protested. 

"  Of  course,"  insisted  the  salesman,  "  of  course  you 
would  have  room  for  both.  A  driveway  and  a  small 
garage  are  not  going  to  take  all  of  that  space. " 

His  argument  was  good.  His  offer  was  unusual,  and 
the  suburbanite  decided  to  accept.  Grudgingly  he 
gave  up  one  small  corner  of  his  garden  ;  the  garage 
was  erected,  and  the  auto  installed. 

While  the  good  suburbanite  had  felt  some  hesitancy 
about  buying  the  automobile,  his  wife  and  daughters 


BACK  TO  THE  LAND  221 

had  no  scruples  whatever.  Indeed,  they  had  played 
no  inconsiderable  part  in  the  call  of  the  friendly  neigh- 
bor who  had  the  agency.  Once  the  machine  was  in- 
stalled they  began  making  plans.  Their  neighbors  had 
owned  machines  for  a  long  time,  and  they  had  done 
many  lovely  things  with  them.  At  last  the  time  had 
come  when  this  family  might  do  likewise.  Therefore 
they  arranged  the  time.  When  they  went  out  to  din- 
ner, father  took  them  in  the  auto,  and  on  several  occa- 
sions they  even  planned  dinners  in  order  to  go  out  thus 
proudly.  On  Saturday  afternoon  there  were  teas,  golf 
matches  at  the  club,  trips  to  town,  and  little  spins 
through  the  country  with  friends  of  the  family.  They 
stayed  at  home  when  it  rained.  Otherwise  they  were 
abroad  with  father  and  the  auto. 

That  spring  father  made  a  garden.  He  found,  how- 
ever, to  his  surprise,  that  he  was  unable  to  keep  the 
patch  cultivated.  It  was  smaller  than  it  had  been  the 
year  before,  too.  Nevertheless,  he  was  always  out 
with  the  auto  on  clear  days,  and  when  it  rained  he 
could  not  work  in  the  garden  anyway,  so  he  overhauled 
the  machine. 

That  is  not  the  end  of  the  story.  If  space  permitted, 
it  would  be  possible  to  tell  how  the  garden  was  a  fail- 
ure that  year,  and  how  the  following  season  father, 
who  had  suddenly  found  gardening  a  very  discour- 
aging and  unprofitable  business,  decided  not  to  plant  a 
garden.  Then,  too,  the  prices  of  vegetables  rose,  and 
the  cost  of  repairs  on  the  car  that  second  season  were 
high.  Mother  and  the  girls  smiled  gayly  at  the  neigh- 
bors as  they  started  out  on  Saturday  afternoon  for  a  lit- 
tle spin  ;  but  father  did  not  smile.  He  was  thinking 


222       KEDUCING  THE  COST  OF  LIVING 

of  his  check-book,  and  remembering,  a  little  ruefully, 
what  splendid  physical  trim  he  was  in  while  he  dug  iu 
the  garden. 

The  tale  has  no  moral.  Sometimes  it  is  an  auto ; 
sometimes  it  is  a  larger  house,  or  a  more  expensive 
environment.  The  general  proposition  remains  the 
same,  however.  The  man  who  chooses  the  truck-patch 
reduces  the  cost  of  living  for  his  family,  while  the  man 
who  chooses  the  auto  increases  it. 

4.  GETTING  THE  CITY  MAN  BACK 
The  city  man  must  be  brought  back  to  the  land.  Even 
a  truck-patch  twelve  by  twenty  feet  will  yield  more 
than  no  truck-patch  at  all.  Even  the  small  cozy 
bungalow  of  nine  rooms  will  prove,  in  the  long  run, 
more  satisfying  than  the  mansion  of  thirty  rooms. 
The  cost  of  living  depends  in  a  very  considerable  meas- 
ure on  the  extent  to  which  people  are  willing  and  able 
to  serve  themselves.  If  men  will  get  back  to  self- 
service  and  dispense  with  some  of  the  numerous  forms 
of  service  which  are  rendered  them  in  the  city,  they 
will  go  far  toward  reducing  the  high  cost  of  living. 

Will  the  city  woman  go  back  to  the  land  ?  Will  the 
well-to-do,  smartly  tailored,  finely  educated,  socialty 
connected  city  woman  at  last  realize  the  importance  of 
serving  herself? 

The  well-to-do  city  woman  has  servants  now.  She 
is  never  seen  demeaning  herself  by  washing  the  win- 
dows, for  example.  A  servant  does  that.  What  has 
she  to  say  to  washing  and  ironing  f  Washing  and  iron- 
ing ?  Never  !  Servants  do  that.  Does  she  set  her  own 
table,  cook  her  own  food,  make  her  own  hats  and 


BACK  TO  THE  LAND  223 

gowns,  clean  and  keep  in  order  her  own  house  1  Yes, 
she  does  such  of  those  things  as  do  not  show  to  any 
considerable  degree.  Otherwise  the  servants  do  it. 
The  well-to-do  city  woman  really  depends  upon  her 
servants  a  great  deal.  Then,  too,  the  telephone  helps 
her  with  the  grocery,  the  butcher  shop,  and  the  drug 
store  ;  the  bread  boy,  the  milk  man,  and  the  ice  man 
call  every  day  ;  and  the  trains  and  trolleys  are  so  con- 
venient !  Surrounded  by  service,  which  is  paid  for 
usually  by  the  man  of  the  family,  the  well-to-do  city 
woman  finds  it  quite  unnecessary  to  exert  herself 
severely. 

The  well-to-do  city  woman  keeps  her  youth.  The 
lines  do  not  sink  into  her  face.  The  burdens  of  life  do 
not  bow  her  shoulders,  or  sour  her  temper.  When  she 
finds  the  world  getting  too  strong  for  her,  she  goes  to 
the  matine'e. 

"Indeed!"  she  cries  testily,  "but  I  am  always 
busy. " 

Yes,  busy  and  always  occupied.  So  is  the  man  who 
tosses  a  ball  against  the  side  wall  and  catches  it  again, 
and  again,  and  again.  The  well-to-do  city  woman  is 
occupied  with  clubs,  lectures,  shopping,  calling,  card 
playing,  dancing,  and  the  like.  Some  of  this  work  is 
vitally  important  to  the  future  of  society, — the  work 
for  social  improvement,  as  an  example.  The  city 
woman  is  occupied,  but  the  vast  majority  of  her  hours 
are  spent  in  doing  things  which  bring  pleasure  to  her, 
at  the  expense  of  service  from  some  other. 

My  lady  is  proud  of  her  youthful  lips  and  her  deli- 
cately rounded  cheeks.  Set  them  beside  the  lips  and 
cheeks  of  this  other  woman  here.  She  draws  back  in 


224       KEDUCING  THE  COST  OF  LIVING 

disgust.  Her  lips  are  straight  and  firm ;  her  cheeks 
are  seamed  ;  but  remember  that  she  has  borne  many 
children,  and  worked  arduously  for  them,  by  day  and 
by  night.  The  lines  on  her  face  are  the  lines  of  service. 
My  lady's  face  is  fair  ;  hers  bears  the  stamp  of  the  iron 
cross.  She  has  laid  her  youth  and  beauty  aside  to 
serve  those  who  were  dependent  upon  her. 

My  lady,  come  back  to  the  land.  Come  back  to 
service.  It  will  line  your  brow  and  ridge  your  cheek, 
but  it  will  leave  a  satisfaction  in  your  soul  which  you 
can  never  possess  while  you  lie  back  in  the  lap  of  com- 
fort and  luxury,  provided  by  the  efforts  of  others. 

5.    GETTING  THE  CHILDREN  BACK 
The  children  of  the  well-to-do  may  come  back  to  the 
land,  and  thereby  reduce  the  cost  of  living.     In  many 
a  home  they  are  being  taught  to  look  for  service  from 
others,  and  to  serve  themselves  not  at  all. 

There  are  tasks,  even  in  the  city  flat  and  in  the  city 
house,  which  children  can  do.  These  tasks  are  now 
done  by  servants,  or  by  the  adult  members  of  the 
family.  Turn  them  over  to  the  children.  Teach  them 
service.  Not  one  child  should  escape.  Each  should 
feel  pressing  upon  his  life,  or  her  life,  the  responsibility 
for  some  part  of  the  work  of  the  home.  The  part  may 
be  a  very  simple  one.  The  work  will,  of  course,  be 
fitted  to  the  child's  age  and  ability  to  work.  But  it 
will  make  the  child  feel  that  he  belongs  to  the  family, 
and  that  the  family  is,  in  a  very  real  sense,  dependent 
upon  his  assistance. 

There  is  one  condition,  however,  that  may  not  be 
ignored  in  this  connection.  Where  servants  are  relied 


BACK  TO  THE  LAND  225 

upon  to  do  the  work,  the  children  cannot  expect  to 
take  a  share  of  the  burden  incident  to  serving  the  fam- 
ily. Servants  and  servility  have  become  so  insepa- 
rable that  servants  and  masters'  children  will  hardly 
work  together. 

The  service  which  a  child  may  perform  is  compara- 
tively slight.  The  principle  of  service  and  the  habit 
of  service  which  the  service  of  the  child  instills,  is  of 
incalculable  value.  Bring  the  children  back  to  the 
land.  Teach  them  how  vitally  important  it  is  that 
every  member  of  society  should  serve,  to  the  extent  of 
his  powers,  in  the  advancement  of  his  own  interests 
and  the  interests  of  the  group  to  which  he  belongs. 

6.  GETTING  THE  FABMEB  BACK 
There  is  a  pressing  need  for  the  farmer  to  come  back 
to  the  land.  He  is  leaving  it — renting  his  farm  and 
moving  into  the  village,  where  he  expects  to  pass  the 
remainder  of  his  days  in  ease  and  comfort.  His  chil- 
dren are  leaving  it — going  into  the  city,  and  there 
struggling  madly  in  that  surging  torrent  of  humanity 
which  rushes  onward,  aiming,  for  the  most  part,  at  a 
goal  called  success.  Even  while  he  stays  on  the  farm, 
the  farmer  depends  less  and  less  on  his  own  efforts, 
and  more  and  more  on  the  sale  of  a  specialized  crop, 
in  return  for  which  he  will  buy  what  he  needs.  Mister 
Farmer,  you  are  needed  on  the  land  ! 

There  is  a  belief  abroad — a  belief  that  has  taken 
fast  hold  of  thousands — that  the  time  for  a  man  to  re- 
tire is  the  time  when  he  can  get  enough  to  live  on 
without  working.  Could  any  fallacy  be  a  greater 
menace  to  the  future  of  society  1  If  a  man  has  enough, 


226       KEDTJCING  THE  COST  OF  LIVING 

he  retires  at  sixty,  at  forty.  Suppose  his  father  has 
left  him  enough,  shall  he  retire  when  he  comes  of  age 
and  falls  into  his  income  ?  Is  it  the  hope  and  purpose 
of  American  society  to  develop  a  leisure  class  ?  Such  a 
luxury  adds  immensely  to  the  cost  of  living,  because 
when  there  is  a  leisure  class,  it  is  of  necessity  sup- 
ported by  the  workers.  The  time  for  a  man  to  retire 
is  the  time  when  he  can  no  longer  serve.  Then,  and 
no  sooner,  he  should  lay  aside  his  harness. 

Will  the  farmer's  children  come  back  to  the  laud? 
Are  the  agricultural  courses  offered  in  the  schools,  and 
the  increasing  comforts  of  rural  living  sufficiently 
powerful  to  bring  them  back  ?  The  city  is  full  of  gay 
sights  and  loud  sounds.  There  is  laughter  there  and 
jollity.  The  newcomer  and  the  superficial  observer  do 
not  see  the  bitterness  and  the  hate.  The  city  blazes 
with  light  and  glitters  with  opportunity.  Will  the 
boy  and  the  girl  withstand  its  lure,  and  instead  be  con- 
tent with  the  simple  life  of  the  farm  ? 

A  great  band  of  men  and  women  is  striving  to  per- 
suade country  boys  and  girls  of  the  value  of  the  sim- 
pler life.  If  they  will  heed  and  understand,  they  may 
do  much  to  reduce  the  high  cost  of  living,  both  for 
themselves  and  for  the  rest  of  mankind. 

The  farms  need  improvement.  There  are  countless 
possibilities  in  intensive  cultivation.  Each  farmhouse 
would  be  more  livable  if  it  had  beside  it  an  excellent 
truck  garden.  There  is  such  a  thing  as  farm  speciali- 
zation so  high  that  the  costs  of  the  product  far  out- 
weigh the  advantages  to  specialization.  If  the  farmer, 
well  trained  in  his  craft,  will  come  back  to  the  land, 
he  can  perform  a  service  of  the  greatest  social  value  in 


BACK  TO  THE  LAND  227 

reducing  the  living  costs.  The  motto  of  business  is 
"  Efficiency  in  All  Things."  He  applies  to  agriculture 
the  formulas  that  have  proved  successful  in  the  de- 
velopment of  manufacturing,  and  he  uses  his  laud. 

7.    SELF-SERVED,  SELF-SAVED 
There  is  a  salvation  in  getting  back  to  the  land.     A 
small  part  of  this  salvation  lies  in  a  reduction  in  the 
cost  of  living.     A  great  part  of  it  lies  in  self-service. 

Man  may  not  live  by  bread  alone.  The  manifold 
nature  which  is  his  demands  use.  There  is  a  law  of 
nature,  inevitable,  everlasting, — "  The  soul  that  idleth 
it  shall  surely  die. "  The  penalty  of  disuse  is  decay. 
There  is  no  compromise  with  this  behest. 

Back  to  the  land,  back  to  service,  means  back  to  a 
complete  life.  The  man  who  is  self-served  drinks 
more  deeply  from  the  springs  of  life  than  he  who  is 
served  by  others.  The  road  through  service  leads  to 
the  heights  of  life. 


XIX 

SOCIAL  EDUCATION 

1.    THE  DIRECTION  OF  HORSE  SENSE 

THE  reduction  of  the  cost  of  living  through  a  resort 
to  the  simple  life  and  through  a  movement  toward 
self-service,  will  be  most  effective  among  the  well-to- 
do.  Some  readjustments  are  necessary  among  people 
of  low  income.  On  the  whole,  however,  such  people 
now  live  lives  of  comparative  simplicity,  and  depend, 
in  large  measure,  on  themselves  for  such  service  as 
they  require.  The  problem  of  simplifying  life  and  of 
reestablishing  personal  service  is  a  problem  of  the 
well-to-do  ;  the  outcome  of  a  well-directed  social  edu- 
cation should  be  a  reduction  of  living  costs  for  all 
classes. 

Most  tasks  may  be  performed  in  an  easy  way,  or  in 
an  infinite  number  of  more  difficult  ways.  The  faculty 
of  finding  the  easiest  way  is  often  described  as  ingenu- 
ity or  horse  sense. 

Ingenuity,  like  any  other  human  attribute,  may  be 
cultivated  through  additions  of  knowledge  or  of  ex- 
perience. Experience  is  gained  in  only  one  way, — 
personally.  Knowledge,  which  is  an  accumulation  of 
the  experiences  of  the  past,  may  be  imparted  to  people 
through  education.  Social  education  consists  in  im- 
parting to  individuals  the  experience  which  has  been 


SOCIAL  EDUCATION  229 

gained  in  the  doing  of  certain  things.  One  man's  op- 
portunities of  gaining  experiences  are  so  limited  that 
they  may  be  enriched,  to  almost  an  infinite  degree,  by 
adding  to  them  the  experiences  which  other  individu- 
als have  had  in  the  attempts  to  attain  similar  results. 

Social  education  will  have  its  first  effects  upon  the 
purchasers  of  the  community.  At  present,  the  power 
of  directing  expenditure  for  consumption  goods  rests 
largely  with  women.  Producers  are  in  business  to 
make  goods  for  buyers.  It  is  the  producers'  business 
to  find  out  what  buyers  want,  and  then  to  supply  that 
want.  The  buyer  thus  becomes  the  center  of  interest. 
As  the  buyers  insist,  the  producers  yield.  In  what 
ways  may  the  buyers  be  educated  to  reduce  living 
costs? 

2.  WHERE  TO  BUY  AND  How 
The  ordinary  family  spends  from  three-fourths  to 
four-fifths  of  all  the  income  that  it  receives  for  food, 
clothing,  fuel  and  light,  recreation,  health  and  sundry 
minor  items.  The  woman  of  the  house  ordinarily  takes 
charge  of  this  spending. l  Therefore  it  should  be  a  part 
of  the  duty  of  social  education  to  train  the  women  of 
the  community  to  wise  buying.  There  are  two  ways 

1  Some  idea  of  the  total  significance  of  the  buying  power  of  women 
in  the  community  may  be  gained  by  a  rough  estimate.  The  income 
of  ordinary  families  in  industrial  sections  ranges  from  $400  to 
$1100  with  the  mode  (maximum  number)  at  $600  or  $700.  The 
latest  census  returns  show  twenty  million  families  in  the  United 
States.  Since  only  about  one-third  of  the  population  is  engaged  in 
agriculture,  there  should  be  perhaps  twelve  or  fourteen  million 
families  depending  largely  upon  income  from  some  industry  other 
than  agriculture.  Even  if  the  minimum  is  placed  at  ten  million 


230       BEDUCING  THE  COST  OF  LIVING 

in  which  this  can  be  done, — First,  through  the  school ; 
and  second,  through  well-directed  publicity  channels 
maintained  by  the  city  and  the  state. 

Every  school  should  maintain  a  course  in  domestic 
science,  which  teaches  the  girls,  among  other  things, 
how  to  buy  wisely.  Such  knowledge  should  extend 
through  the  entire  list  of  things  which  the  woman  is 
called  upon  to  buy  in  the  course  of  her  domestic  life, — 
food,  kitchen  utensils,  furnishings  and  furniture,  and 
clothing. 

There  are  a  number  of  American  public  schools  in 
which  the  buying  work  is  being  carefully  planned  and 
executed.  In  one  school  where  particular  attention  is 
paid  to  buying,  certain  of  the  girls  who  are  taking  the 
more  advanced  work  in  cooking  are  called  upon  to 
serve  a  daily  luncheon  to  the  faculty.  The  members 
of  the  faculty  provide  the  money,  and  each  day  three 
girls  are  assigned  to  the  task  of  planning  the  meal, 
buying  and  preparing  the  food.  In  this  lesson,  the 
planning  and  buying  count  even  more  than  the  cook- 
ing. In  another  school,  girls  and  boys  alike  are  asked 
to  serve  dinners  on  a  specified  sum.  A  part  of  their 
arithmetic  lesson  consists  in  figuring  out  food  costs. 
Similar  work  is  done  in  the  case  of  clothing.  In  one 
sewing  department,  where  girls  make  their  own 
patterns  as  well  as  their  own  dresses,  each  girl  is 
required  to  keep  a  cost  account,  in  which  appears  a 
record  of  all  materials  used  and  of  all  time  spent.  By 

(a  very  low  figure)  these  families,  at  $600  per  year,  would  spend 
annually  six  billions  of  dollars.  Such  an  approximation  is  in  no 
sense  accurate.  It  merely  throws  the  magnitude  of  the  issue  into 
the  foreground. 


SOCIAL  EDUCATION  231 

a  glance  at  this  cost  sheet  the  girl  can  tell  exactly 
what  outlay  her  garment  has  involved. 

There  is  a  feeling  in  some  communities  that  domestic 
science  has  its  place  in  the  high  schools.  No  edu- 
cational proposition  could  be  more  fallacious.  The 
fact  of  the  matter  is  that  domestic  science  has  a  place 
in  the  knowledge  of  every  girl  who  goes  through  an 
American  school. 

There  is  a  great  difference  between  deciding  in  what 
year  of  the  school  domestic  science  shall  go,  and  in 
deciding  that  every  girl  shall  have  domestic  science 
training.  More  than  nine-tenths  of  the  girls  will 
practice  domestic  science.  Therefore  the  training  is 
important  for  them.  About  three-fourths  of  the  girls 
never  go  beyond  the  eighth  grade,  therefore  the  training 
must  be  given  to  them  before  that  time.  In  factory 
neighborhoods  and  in  districts  where  the  poorer 
families  live,  very  few  girls  finish  the  grammar  school 
and  almost  none  begin  high  school.  What  is  more 
absurd  than  to  go  into  such  a  community  with  the 
proposition  that  domestic  science  belongs  in  the  high 
school  ?  Domestic  science  belongs  in  the  grade  where 
it  will  reach  the  girl  before  she  leaves  school.  Whether 
she  leaves  in  the  third  grade,  or  the  tenth,  the  fact  still 
holds. 

The  city  and  state  may  both  assist  in  spreading 
knowledge  about  buying  by  maintaining  a  market 
bureau.  From  this  bureau,  information  may  be  dis- 
tributed regarding  wholesale  market  prices,  and  retail 
prices  in  various  parts  of  the  city.  The  chain  store, 
through  its  newspaper  advertisements,  does  much  to 
stabilize  prices.  This  same  price  stabilizing  influence 


232       REDUCING  THE  COST  OF  LIVING 

could  be  broadened  if  it  were  made  official.  An  official 
daily  bulletin  of  prices,  issued  broadcast,  and  published 
in  the  papers,  would  be  a  boon  to  buyers. 

The  buyer  must  look  to  three  things.  First,  the 
nature  of  the  commodity  ;  second,  the  quality  ;  and 
third,  the  quantity.  Each  element  is  a  factor  in  effi- 
cient buying. 

The  nature  of  the  commodity  is  the  prime  essential 
in  buying.  If  muslin  will  serve  the  purpose  as  well, 
or  better,  why  buy  linen  t  If  the  table  is  already  sup- 
plied with  an  ample  amount  of  protein,  why  buy  other 
proteids  at  a  high  price  when  starches,  at  a  tithe  of 
the  cost,  would  serve  as  a  balance  to  the  diet  ?  Effect- 
ive buying  presupposes  some  knowledge  of  the  nature 
of  goods  that  will  fill  a  particular  need. 

Equal  importance  attaches  to  the  quality  of  the 
material.  The  well-to-do  have  an  expensive  habit  of 
entering  a  store  and  vociferating, — "Your  best."  Be- 
cause of  that  fact  "  our  best  "  is  always  hung  two  pegs 
higher  in  the  scale  of  price  than  it  would  be  if  the 
well-to-do  were  less  forward  about  it.  The  woman  of 
moderate  means  can  seldom  afford  "  our  best."  She 
must  content  herself  with  some  less  expensive  grade 
than  the  premier.  The  ability  to  pick  the  grade  which 
will  yield  a  maximum  of  return  is  the  earmark  of  an 
experienced  and  a  judicious  buyer. 

Less  emphasis  might  be  placed  on  the  quantity  of 
goods  bought  if  all  fraud  among  retail  dealers  could 
be  eliminated.  Investigations  among  the  dealers  of 
various  cities  have  shown  an  astonishing  proportion 
of  false  weights,  false  measures,  and  other  devices  for 
fleecing  customers  by  selling  them  short  quantity. 


SOCIAL  EDUCATION  233 

These  are  three  general  rules  that  the  buyer  should 
seek  to  enforce  in  the  interest  of  readjusted  living 
costs.  Buyers  should  insist  that  goods  be  produced 
under  sanitary  conditions ;  that  the  men  and  women 
who  produced  them  have  fair  conditions  of  labor ;  and 
if  possible,  they  should  see  the  goods  which  they  buy. 
The  latter  point,  applying  primarily  to  'phone  orders, 
is  significant  for  the  well-to-do,  and  negligible  for 
those  of  low  income. 

The  consumer's  power  to  dictate  the  conditions 
under  which  production  takes  place,  including  the 
conditions  of  labor  and  of  sanitation,  has  been  more 
generally  discussed  than  realized.  The  consumer  is 
the  objective  point  in  the  productive  processes.  Pro- 
duction is  carried  on  for  the  purpose  of  selling  goods 
to  consumers.  An  organized  group  of  consumers  can, 
therefore,  dictate  terms  to  producers.  A  beginning  in 
the  organization  of  consumers  may  be  found  in  the 
Consumers'  Leagues.  It  remains  for  the  women  on 
low  income  to  organize  a  consumer's  union  that  shall 
be  in  a  position  to  make  way  against  the  power  of  or- 
ganized producers. 

3.    DOMESTIC  SCIENCE 

There  is  another  side  of  the  problem,  equal  in  im- 
portance to  the  purchasing  side.  Things  that  are 
bought  are  bought  to  be  used.  Therefore,  wise  use 
takes  its  logical  place,  side  by  side  with  efficient  buy- 
ing. 

Domestic  science  is  a  term  relating  to  those  home 
activities  which  are  involved  in  the  utilization  of 
goods  and  services  in  the  interest  of  the  members  of 


234       EEDUCING  THE  COST  OF  LIVING 

the  family  and  the  home.  Since  the  family  and  the 
home  are  basic  social  units  in  Western  civilization, 
the  administration  of  their  affairs  ranks  as  a  task  of 
immense  significance. 

The  burden  of  directing  home  activities  falls  largely 
upon  parents.  The  burden  of  insuring  well-directed 
homes  in  the  next  generation  falls  no  less  pertinently 
upon  the  school.  Home  teaching  and  school  teaching 
combined  afford  the  sum  total  of  the  instruction  which 
any  girl  may  hope  to  receive  in  the  art  of  home  man- 
agement. 

The  old-fashioned  home, — a  homestead  where  in- 
dustries and  crafts  were  carried  on  by  the  housewife, 
— taught  domestic  science  in  all  of  its  traditional 
branches,  just  as  the  general  farm  taught  general 
farming  in  all  of  its  tradition  branches.  Such  homes 
are  being  rapidly  replaced  by  the  city  house,  apart- 
ment or  tenement.  The  industries  and  crafts  of  the 
old-fashioned  home  are  now  carried  on  in  factories. 
Many  of  the  home  activities  which  were  formerly  a 
training  ground  in  domestic  science  have  left  the 
home,  probably  forever.  At  the  same  time,  the 
search -light  of  experimental  science  has  been  turned 
upon  home  problems.  Chemistry  and  dietetics  have 
made  their  contributions.  Sanitary  science  has  in- 
sured additional  safeguards  to  health.  Mechanical 
appliances  and  utensils  have  greatly  decreased  the 
amount  of  back-breaking  labor  incident  to  home  work. 
The  movement  of  progress  has  been  toward  a  cooper- 
ative execution  of  cooperative  tasks,  leaving  to  the 
home  only  individualistic  work. 

The  home  still  has  many  functions,  however.     Wher- 


SOCIAL  EDUCATION  235 

ever  there  are  meals  prepared,  or  children  tended, 
or  households  tidied  and  cleaned,  or  household 
goods  purchased,  or  food  supplies  laid  in,  there  the 
girl  may  be  taught  in  the  home.  Home  responsibility 
has  not  lessened  with  the  disappearance  of  home  occu- 
pations. It  has  rather  increased  because  the  mother 
has  more  time  free  from  home  responsibilities  to  de- 
vote to  her  daughter's  home  education.  There  re- 
mains one  notable  barrier  to  home  education  in  do- 
mestic science, — the  ignorance  of  mothers. 

Mothers  cannot  teach  what  they  themselves  do  not 
know.  The  knowledge  of  mothers  is  limited  by  two 
sets  of  forces.  On  the  one  hand,  their  mothers,  igno- 
rant in  turn,  did  not  give  them  adequate  instruction. 
On  the  other  hand,  the  new  discoveries  of  science  are 
not  often  brought  to  the  attention  of  mothers,  particu- 
larly of  busy  mothers.  The  logical  avenue  of  approach 
to  the  mothers  of  the  next  generation  seems  to  be 
through  the  school. 

There  are  several  ways  in  which  the  school  may  ap- 
proach the  domestic  science  problem.  On  the  one 
hand,  college  courses  in  domestic  science  may  be 
offered  side  by  side  with  college  courses  for  men 
in  agriculture,  engineering,  architecture  and  finance. 
Again,  domestic  science  work  may  be  made  a  part  of 
the  required  course  in  the  high  school.  Neither  the 
high  school  nor  the  college  reaches  the  great  major- 
ity of  girls.  For  them,  the  eighth,  seventh,  or  even 
sixth  grade  sees  the  end  of  their  schooling.  The  real 
work  of  spreading  domestic  science  knowledge  will  be 
done  effectively  only  in  these  grades. 

Besides    the    formal    courses   in   domestic  science, 


236       REDUCING  THE  COST  OF  LIVING 

there  are  springing  up,  in  all  parts  of  the  country, 
schools  devoted  specifically  to  domestic  science  train- 
ing. Notable  among  these  are  the  home  schools,  of 
which  that  at  Providence  is  a  pioneer  and  an  excellent 
example.  Such  a  school  consists  of  a  home  or  a  ten- 
ement, simply  fitted  out,  in  which  the  girls  cook,  sew, 
clean,  wash,  iron,  tend  the  furnace,  beautify  the  back 
yard,  and  do  any  one  of  the  other  tasks  which  falls 
to  the  housekeeper.  Eun  by  evening  as  well  as 
by  day,  these  home  schools  afford  an  excellent  op- 
portunity for  working  girls  and  schoolgirls  alike 
to  acquire  a  store  of  practical,  first  hand  domestic 
knowledge. 

Domestic  science,  well  taught  at  home  and  in  school, 
will  prove  an  important  factor  in  lowering  living 
costs.  The  smallest  income,  well  administered,  is 
more  efficacious  in  home  organization  than  a  large 
income,  unwisely  squandered.  There  is,  perhaps, 
no  plan  for  reducing  living  costs  more  immediately 
practical  than  one  which  will  involve  more  advanta- 
geous buying  and  more  efficient  use  of  the  products 
consumed  in  the  home. 

4.  CONSUMER'S  COOPERATION 
The  organization  of  consumers  finds  its  expression  in 
the  consumer's  cooperation  which  has  proved  so  success- 
ful in  the  British  Isles  and  in  parts  of  the  Continent. 
Begun  less  than  a  hundred  years  ago  by  a  few  weavers 
of  Eochdale,  England,  who  made  wholesale  purchases 
of  groceries  out  of  a  common  fund,  the  movement  has 
spread,  until  it  has  reached  immense  proportions. 
The  cooperative  societies  own  retail  stores,  wholesale 


SOCIAL  EDUCATION  237 

houses,  factories,  steamers,  and  all  of  the  paraphernalia 
of  a  great  business. 

The  business  of  the  cooperative  societies  abroad 
has  continued  to  grow  with  unabated  rapidity.  Their 
patrons  are  numbered  by  the  tens  of  thousands  and 
their  annual  transactions  by  the  hundred  of  millions  of 
dollars. 

Thus  far  the  cooperative  movement  has  made  little 
headway  in  the  United  States.  For  this  failure, 
various  reasons  are  advanced.  Private  businesses  are 
more  efficiently  managed  ;  they  sell  on  close  margins  ; 
they  are  already  operated  on  a  large  scale  (chain  stores 
and  department  stores)  ;  they  have  given  the  consumers 
the  benefit  of  low  prices  without  placing  upon  them  the 
burden  of  investment.  On  the  other  side,  it  is  urged 
that  the  salaries  and  rewards  offered  by  private  busi- 
ness are  so  much  greater  than  those  offered  by  coopera- 
tive societies  that  the  able  men  all  find  their  way  into 
private  business,  leaving  only  second  rate  men  for  the 
cooperative  ventures.  It  is  further  urged  that  the 
universality  of  opportunity  and  the  mad  rush  after 
commercial  success  lead  men  to  turn  to  private  busi- 
ness as  offering  bigger,  if  less  sure  chances. 

Whatever  the  cause  of  failure  among  cooperative 
societies  in  the  United  States,  the  fact  stands.  The 
Patrons  of  Husbandry,  and  the  Knights  of  Labor, 
among  many  other  organizations,  at  one  time  had 
consumer's  cooperation  organized  on  a  broad  scale. 
After  an  apparent  success  which  lasted  for  a  genera- 
tion, the  movements  faded,  one  by  one,  until  at  the 
present  time  there  are  only  a  few  scattering  ventures 
here  and  there  through  the  country.  At  present  there 


238       EEDUCING  THE  COST  OF  LIVING 

is  every  indication  that  a  new  cooperative  movement  is 
under  way. 

Consumer's  cooperation,  if  it  can  be  organized  on  a 
sufficiently  large  scale  to  be  successful,  effects  con- 
siderable savings  to  the  consumers.  Whatever  its 
ultimate  success  in  the  United  States  its  achievements 
abroad  justify  Americans  in  looking  toward  it  as  one 
important  means  of  reducing  living  cbsts. 

5.    RAISING  THE  STANDARD  OF  PUBLIC  DEMAND 

The  problem  of  social  education  is,  at  bottom,  a 
problem  of  raising  the  standard  of  public  demand. 
Thus  far  the  public  has  been  content  to  see  the  home 
administered  on  the  same  basis  as  the  homes  of  yore. 
The  voice  of  science  has,  with  difficulty,  penetrated  the 
thick  hangings  of  tradition  which  deadened  the  sounds 
within  the  precincts  called  "home."  The  hand  of 
time  dealt  gently  with  home  precepts,  and  the  children 
found  the  home,  and  preserved  it  as  it  had  been  found 
and  preserved  by  their  fathers. 

An  essential  part  of  the  home  tradition  was  bound  up 
in  the  concept  of  home  individuality.  There  was  to  be 
little  common  impulse  and  less  common  life.  Each 
man,  in  his  castle,  was  to  reign  supreme,  free  of  the 
dictates  of  any  other  man.  The  individual  home  was 
to  be  a  law  unto -itself,  so  the  story  ran,  self-sufficient 
and  self-containing. 

The  industrial  and  social  changes  of  the  past  two 
centuries  make  the  individualistic  home  an  impossi- 
bility. Surrounded  by  myriads  of  other  homes,  cen- 
tered in  cities  and  great  towns,  the  home  assumes  social 
relationship  of  which  our  forefathers,  in  the  village 


SOCIAL  EDUCATION  239 

houses  of  the  eighteenth  and  early  nineteenth  centuries 
never  dreamed.  The  home  can  no  longer  persist  as  an 
individualistic  institution.  It  can,  however,  make 
headway  as  a  part  of  a  greater  social  unit,  the  city  or 
the  community. 

The  standard  of  public  demand  will  be  raised  as  the 
individual  home  with  its  inmates  realizes  its  social  de- 
pendence and  its  social  obligations.  By  such  a  process, 
— cooperating  in  the  expenditure  of  income,  and  col- 
laborating in  the  preparation  of  knowledge  about  effi- 
cient home  management,  social  education  should  es- 
tablish a  standard  of  public  demand  that  may  eventuate 
in  lower  living  costs  for  the  individual  family. 


XX 

INCREASING  THE  EFFICIENCY  OF  FOOD 
DISTRIBUTION 

1.  FOOD  THE  CENTER  OF  INTEREST 
THE  individual  family  may  exercise  a  measure  of 
control  over  its  cost  of  living  by  increasing  the  effi- 
ciency of  buying  and  of  using  products.  A  similar 
gain  may  be  made  through  a  wise  regulation  of  the 
means  by  which  things  are  transported  and  transferred 
from  producer  to  consumer. 

Food  is  the  logical  center  of  interest  in  any  discus- 
sion of  the  machinery  engaged  in  transferring  goods 
from  producer  to  consumer.  The  worker's  family 
spends  two-fifths  of  its  income  for  food.  Furthermore, 
the  knowledge  about  food  distribution  is  more  complete 
than  the  knowledge  about  the  distribution  of  any  other 
item  in  the  family  budget.  Then  too,  a  discussion  of 
food  distribution  efficiency  will  throw  light  on  the 
other  problems  in  the  distribution  of  goods. 

2.  MANKIND  BANISHED  FROM  His  KITCHEN  GARDEN 
The  reorganization  of  industry  called  the  Industrial 
Revolution,  and  the  influx  of  people  into  the  industrial 
cities  and  towns  which  the  Industrial  Revolution  pro- 
duced, has  driven  mankind  from  the  kitchen  garden. 
The  village  dweller  was  largely  independent  of  re- 


EFFICIENCY  OF  FOOD  DISTBIBUTION    241 

tailers.  With  his  kitchen  garden,  his  domestic 
animals,  and  his  other  means  of  secondary  income,  he 
was  able  to  provide  for  his  family  a  food  supply  at 
cost.  No  middlemen  presented  their  charges  ;  no  job- 
bers were  maintained  out  of  the  profits.  The  major 
portion  of  the  villager's  food  supply  went  directly 
from  producer  to  consumer.  In  the  vast  majority  of 
the  cases  where  the  villager  was  himself  the  producer, 
doing  the  "  chores  "  in  spare  time,  there  was  not  even 
a  labor  charge  against  the  product. 

Secondary  sources  of  income  are  far  less  possible  in 
the  city  than  they  were  in  the  village.  Almost  every- 
thing which  is  used  must  be  bought.  Instead  of  pro- 
curing a  part  of  his  living  through  the  expenditure  of 
leisure  time,  the  city  dweller  is  compelled  to  buy  all  of 
it  from  the  merchants.  He  no  longer  pays  a  cost  price. 
The  producer,  the  transportation  agency,  the  jobber, 
the  carters,  the  banking  houses,  and  a  score  of  others 
who  participate  in  bringing  the  products  from  the  pro- 
ducer to  the  consumer,  must  charge  against  the  retail 
price  some  profit  in  order  that  they  may  continue  in 
business. 

The  loss  of  the  kitchen  garden  means  a  loss  of  direct 
communication  between  producer  and  consumer.  Each 
intervening  step  which  is  introduced  adds  to  the  final 
cost  of  the  product. 

"While  the  producer  lived  in  the  neighborhood  of  the 
city,  milked  his  cows,  cared  for  his  poultry,  picked  his 
fruit  and  vegetables,  placed  them  in  a  market  wagon 
and  peddled  them  at  the  consumer's  door,  there  was 
still  a  fairly  direct  connection  between  the  two.  Even 
that  connection  has  long  since  ceased  to  exist. 


242       KEDUCING  THE  COST  OF  LIVING 

The  food  supply  of  cities  conies  from  relatively  dis- 
tant points,  through  a  large  number  of  intermediate 
steps.  Milk  is  produced  011  a  farm  a  hundred  miles 
distant  from  the  city  market.  Vegetables  are  grown 
in  Georgia  and  eaten  in  New  York.  The  fruit  of  Cali- 
fornia finds  its  way  to  the  fruit  stands  of  Boston.  The 
Michigan  celery  has  a  national  market.  Specialization 
in  agriculture  is  impossible  unless  wide-spread  markets 
can  be  secured.  Improved  transportation  facilities, 
and  the  consequent  possibility  of  marketing  products 
over  a  broad  area,  have  encouraged  agricultural  special- 
ization, until  a  point  has  been  reached  where  local- 
ities produce  for  national,  or  even  international, 
markets. 

3.    EEDUCING  THE  STEPS  FROM  PRODUCER  TO 
CONSUMER 

The  cost  of  living  may  be  materially  reduced  by  re- 
ducing the  steps  between  producer  and  consumer.  The 
growth  of  cities  makes  the  separation  of  the  two  inevita- 
ble. The  distance  of  the  separation  may  be  materially 
modified  by  the  adoption  of  certain  measures  calculated 
to  eliminate  unnecessary  intermediate  processes. 

Waste  should  be  eliminated  wherever  it  exists.  The 
presence  of  an  unnecessary  middleman  involves  waste  ; 
therefore  his  existence  should  not  be  tolerated.  The 
failure  to  provide  adequate  means  of  transportation  in- 
volves waste.  The  transportation  facilities  should  be 
improved.  Efficiency  in  food  distribution  is  one  of  the 
imperative  demands  of  growing  industrial  cities.  Like 
any  other  problem,  it  can  be  met  and  solved  only 
through  intelligent,  scientifically  directed  effort. 


EFFICIENCY  OF  FOOD  DISTRIBUTION    243 

4.     GETTING  GOODS  INTO  THE  CITIES 

The  processes  involved  in  getting  food  products  from 
the  farmer's  gate  to  the  city  flat  are  numerous  and  in- 
tricate in  the  extreme.  Roughly  speaking,  there  are 
two  possibilities.  Either  the  farmer  may  undertake  to 
do  the  work  himself,  or  he  may  depend  upon  some  or- 
ganized agency. 

The  farmer  who  undertakes  to  market  directly  in 
cities  must  rely  upon  horse  or  automobile  power.  He 
must  have  sufficient  help  to  manage  his  farm,  in  addi- 
tion to  the  help  required  in  hauling.  The  limitations 
on  hauling  directly  from  farm  to  city  are  rigidly  pre- 
scribed by  the  contour  of  the  country  and  the  charac- 
ter of  the  roads.  Hauling  by  horse  power  is  possible 
over  fairly  good  roads  for  a  distance  varying  from  ten 
to  twenty  miles.  The  use  of  motor  truck,  which  doub- 
les the  possible  hauling  distance,  is  out  of  the  ques- 
tion unless  roads  are  good. 

If  the  farmer  is  to  market  directly,  he  must  have  suf- 
ficient capital  to  provide  himself  with  hauling  appa- 
ratus and  an  adequate  labor  force.  He  must,  in  addi- 
tion, be  located  on  roads  sufficiently  well  kept  to  per- 
mit of  heavy  hauling  at  most  seasons  of  the  year. 

The  advantages  of  this  direct  relation  between  the 
farmer  and  the  city  consumer  are  manifest.  The  con- 
sumer is  assured  of  the  freshness  and  quality  of  the 
product,  securing  it,  as  he  does,  directly  from  the  pro- 
ducer. The  producer,  on  the  other  hand,  secures  an 
immediate  return  upon  each  transaction.  There  is  no 
unnecessary  loss  due  to  middleman's  profits. 

Beyond  the  comparatively  short  range  of  hauling  by 
horse  or  motor,  and  within  that  range  for  the  farmer 


244        EEDUCING  THE  COST  OF  LIVING 

who  lias  not  the  labor  or  capital,  marketing  must  de- 
pend upon  a  number  of  intermediate  agencies.  In  the 
first  place,  there  is  the  country  buyer  or  jobber  who 
locates  himself  in  a  rural  village,  and  buys  certain 
kinds  of  products.  Through  such  a  buyer,  the  goods 
may  be  shipped  in  carload  lots,  thus  considerably  re- 
ducing freight  charges.  The  buyer,  a  man  experienced 
in  markets  and  marketing,  directs  his  shipments  to 
those  markets  where  the  demand  is  most  active. 

The  local  buyer  depends  for  his  transportation  upon 
railroad  or  trolley  service.  When  his  shipments  reach 
their  destination,  they  pass  through  the  hands  of  one 
or  more  jobbers,  who  dispose  of  them  to  the  retailers. 

5.  MARKETS  AND  TERMINALS 
Considerable  attention  has  been  paid  in  recent  years 
to  the  organization  of  markets.  Products  consigned  to 
city  commission  merchants  have  been  wantonly  des- 
troyed in  order  to  raise  prices ;  commission  men  have 
made  false  returns  to  producers  regarding  the  prices 
received ;  groups  of  commission  men  have  combined 
to  hold  up  the  price  paid  for  products  by  retailers. 
These  practices  may  be  or  may  not  be  prevalent.  In- 
stances of  such  practices  are  on  record,  however,  and 
they  must  be  reckoned  with  in  any  consideration  of  the 
marketing  problem. 

One  great  asset  in  price  regulation  has  been  the  cold- 
storage  plant.  Perishable  goods  can  be  kept  in  cold 
storage  from  a  period  of  surplus  to  a  period  of  scarcity. 
By  utilizing  the  cold-storage  plant  large  stocks  can  be 
accumulated  and  held  in  the  face  of  a  high  demand, 
thus  forcing  up  prices  to  an  abnormal  extent. 


EFFICIENCY  OF  FOOD  DISTEIBUTION    245 

There  is  no  evidence  that  cold  storage  has  raised  the 
general  level  of  prices ;  there  is  every  indication  that 
cold  storage  has  stabilized  prices  over  a  period  of  time, 
and  that  it  may  be  used  for  the  purposes  of  price 
manipulation. 

Cities  may  effect  considerable  modifications  in  the 
cost  of  their  food  supply  through  a  proper  regulation 
of  terminals  and  markets.  In  the  first  place,  both 
railroad  and  trolley  companies  may  be  led  to  establish 
and  maintain  adequate  terminal  facilities,  as  well  as 
terminal  markets.  By  this  means  the  food  supply 
shipped  in  at  any  time  can  be  efficiently  cared  for. 

The  methods  of  handling  terminal  markets  may 
likewise  assist  in  the  reduction  of  food  costs.  A  num- 
ber of  European  cities  license  commission  men  who 
sell  under  bond  in  the  wholesale  markets.  By  this 
means,  the  possibilities  of  fraud  are  greatly  reduced. 
In  other  cities,  farmers'  markets,  both  covered  and  un- 
covered, are  maintained,  where  the  farmers  may  draw 
their  produce  wagons  up  to  the  curb,  or  where  they 
may  rent  stalls  at  cost,  and  sell  their  products  directly 
to  the  consumer.  In  either  case  the  uncertainties  in- 
cident to  the  operation  of  privately  owned  markets 
are  largely  eliminated.  The  city  market  thus  per- 
forms a  real  service  in  facilitating  the  distribution  of 
food. 

6.    PRODUCERS'  COOPERATION 

Both  the  city  and  the  state  can  aid  the  consumer  in 

securing  food  products  at  a  lower  cost  by  distributing 

news  of  marketers  and  markets.     Bulletins  published 

in  the  daily  papers,  posted  in  local  post-offices,  or  sent 


246       BEDUCING  THE  COST  OF  LIVING 

out  through  the  mails,  may  be  employed  to  advise 
both  producers  and  consumers  of  the  state  of  the 
market.  Through  such  information  the  producer  will 
be  enabled  to  take  his  goods  to  the  most  remunerative 
market,  while  the  consumer  has  an  opportunity  to  buy 
at  the  lowest  figure.  Such  information  is  peculiarly 
valuable  in  a  large  city,  where  variations  in  retail 
prices  are  considerable. 

The  profits  of  producers  have  been  materially  in- 
creased both  here  and  abroad  by  means  of  producers' 
cooperation.  Dairymen,  fruit  growers,  truckers,  and 
other  producers  form  organizations  through  which 
they  buy  and  sell  their  products. 

There  is  no  evidence  that  producers'  cooperation 
materially  reduces  the  price  to  the  consumer.  There 
is  evidence,  however,  that  it  results  in  considerable 
advantage  to  the  producer.  There  is  also  evidence 
that  the  consumer  receives  better  service  through  the 
guaranteed  quality  of  the  goods  which  producers'  as- 
sociations turn  out. 

This  discussion  has  been  confined  almost  wholly  to 
the  food  supply,  first,  because  the  expenditure  for  food 
constitutes  the  largest  single  item  in  the  budget  of  the 
ordinary  family  ;  and  second,  because  the  possibilities 
for  reducing  the  cost  of  foods  and  service  are  so  much 
greater  than  the  possibilities  of  reducing  the  cost  of 
clothing  and  other  manufactured  products.  Here, 
also,  there  are  opportunities  for  price  reductions.  The 
mail-order  house  and  the  manufacturer  who  sells  di- 
rect have  both  had  a  considerable  effect  in  modifying 
prices.  There  is,  of  course,  a  tendency  on  the  part  of 
the  mail-order  house  and  manufacturer  to  convert  the 


EFFICIENCY  OF  FOOD  DISTEIBUTION    247 

saviugs  which  are  effected  through  the  elimination  of 
middlemen  into  profits  for  themselves.  This  tendency 
is  offset  by  the  counter  necessity  of  keeping  prices  at 
least  as  low  as  the  prices  of  retail  products,  in  order 
to  secure  trade.  In  the  case  of  mail-order  houses, 
prices  are  kept  generally  lower  than  those  of  the  ordi- 
nary retail  dealer. 

The  reduction  in  the  cost  of  living  that  may  be  ef- 
fected through  increasing  the  efficiency  of  food  dis- 
tribution is  problematical.  It  is,  however,  of  material 
extent.  The  city  and  the  state  of  the  future  will  be 
called  upon  to  play  a  continually  growing  part  in  the 
regulation  of  the  conditions  under  which  food  products 
are  transported  from  producer  to  consumer.  Increas- 
ing efficiency  and  improved  methods  will  eliminate 
those  intermediate  steps  which  involve  inefficiency  or 
waste.  Education  and  wide-spread  knowledge  will  in- 
crease the  consumer's  desire  to  establish  more  direct 
relations  with  the  producer. 


XXI 

CONSERVATION  AS  A  MEANS  OF  REDUCING 
THE  COST  OF  LIVING 

1.    A  SOCIAL  TASK 

CONSERVATION,  meaning  "wise  use,"  necessarily 
carries  with  it  the  thought  of  providing  for  the  future. 
Each  generation  conserves  in  order  that  the  next  may 
use  and  enjoy.  The  idea  is  essentially  social,  since 
conservation  takes  the  form  of  a  duty,  owed  by  the  so- 
ciety of  the  present  to  the  society  of  the  future. 

The  movement  for  conservation  has  as  its  chief  end 
the  conservation  of  natural  resources.  Coal,  iron, 
water-power,  soil  fertility,  are  gifts  which  nature  has 
bestowed,  and  which  man  may  use  or  abuse.  If  these 
gifts  are  used  wisely,  the  service  which  they  offer  to 
mankind  may  be  enjoyed  by  numberless  generations. 
If  they  are  ruthlessly  destroyed  the  present  bankrupts 
the  future.  The  gifts  of  nature  are,  in  a  peculiar 
sense,  gifts  to  all.  The  right  to  them  on  the  part  of 
those  who  live  in  the  present  is  a  right  to  wise  use 
alone. 

May  conservation  be  relied  upon  to  reduce  the  prices 
of  commodities,  or  at  least  to  check  the  rapid  rise  in 
price  ?  There  seems  to  be  little  question  but  that  con- 
servation is  an  essential  element  in  price  control. 

The  cost  of  living  pinches  hardest  in  the  neighbor- 
hood of  natural  resources.  The  rise  in  prices  is  most 


CONSEKVATION  AS  A  MEANS  249 

rapid  in  tlie  case  of  those  commodities  derived  directly 
from  the  laud.  The  price  of  farm  products,  the  price 
of  timber  products,  and  the  price  of  mineral  products 
have  led  the  onward  march  of  price  advance.  If  it 
appears  that  there  is  waste  or  inefficiency  in  the  use 
or  administration  of  natural  resources,  or  if  those 
resources  might  be  added  to  through  some  conserva- 
tion practice,  then  conservation  would  obviously  act  in 
the  direction  of  price  reduction. 

2.  CONSERVATION  POSSIBILITIES 
There  are,  from  the  standpoint  of  the  conservationist, 
three  classes  of  resources, — those  which  are  irretrievably 
destroyed  by  use,  those  which,  when  destroyed,  may 
be  replaced,  and  those  which  may  not  be  destroyed. 
In  the  first  class  fall  minerals  and  fuels.  Each  ton  of 
coal  or  of  ore  mined  is  a  ton  less  in  the  natural 
treasure  house.  So  far  as  science  can  say,  no  consider- 
able addition  is  being  made  to  the  supply  of  minerals 
and  fuels.  Their  quantity  is  fixed  and  use  destroys 
them  permanently.  The  second  class  of  resources  is 
destructible,  but  replaceable.  A  timber  tract,  cut 
over,  may  be  reforested.  Soil  fertility,  exhausted,  may 
be  restored  by  a  resort  to  scientific  agriculture.  Over 
the  supply  of  timber  and  of  soil  fertility  man  has  as 
definite  a  power  of  control  as  he  has  over  the  wheat 
supply.  A  third  class  of  resources — water-power, 
waterways,  and  water  for  irrigation  purposes — is  in- 
destructible. These  resources  may  be  improved  or 
neglected.  Their  potentialities  always  remain.  Each 
one  of  the  three  categories  presents  an  essentially  dif- 
ferent problem  in  conservation. 


250       EEDUCING  THE  COST  OF  LIVING 

Mineral  resources,  limited  in  amouut  by  the  limita- 
tions on  supply,  may  be  wisely  and  efficiently  used  in 
the  interests  of  the  future.  There  is  no  justification  for 
the  wanton  abandonment  of  mines  before  the  minerals 
are  fully  exhausted.  From  the  mine  refuse,  all  possible 
commercial  value  should  be  extracted.  The  mining  of 
minerals  presents,  at  best,  few  direct  conservation 
possibilities.  The  greatest  hope  for  mineral  conserva- 
tion lies  in  the  utilization  of  substitutes.  Water- 
power  may  replace  coal ;  cement  may  replace  steel. 
By  such  substitutions  the  supply  of  power  or  of  build- 
ing material  may  be  indefinitely  increased. 

This  process  of  substitution  has  only  one  drawback 
from  the  standpoint  of  the  cost  of  living, — the  price  of 
the  substitute  is  regulated  by  the  price  of  the  dis- 
appearing resource.  Here  is  a  case  in  point. 

Fifty  years  ago  a  well-to-do  man  bought  a  beautiful 
waterfall,  near  his  native  city,  for  three  thousand 
dollars.  The  water  fell  more  than  two  hundred  feet  in 
a  series  of  cascades.  The  philanthropist  decided  to 
convert  the  place  into  a  public  park,  where  his  fellow- 
citizens  might  enjoy  themselves.  Industrial  possibil- 
ities changed  his  plan.  The  development  of  power 
through  water-generated  electricity  made  it  possible 
to  drive  a  shaft,  conduct  all  of  the  water  from  the  top 
of  the  falls  to  the  turbines  below,  and  by  this  means  to 
convert  a  three-thousand-dollar  waterfall  into  a  power 
plant  generating  enough  electricity  to  run  all  of  the 
industries  within  a  radius  of  a  hundred  miles.  When 
the  plant  was  completed,  it  must  set  a  price  upon  its 
services.  What  price  should  it  set  ?  The  falls  had 
cost  a  trifle  ;  the  construction  had  been  comparatively 


CONSERVATION  AS  A  MEANS          251 

inexpensive  ;  the  power  might  be  sold  at  an  extremely 
low  rate.  Were  such  facts  taken  into  account  ?  Not 
for  a  moment.  "  This  is  our  plant,"  so  the  reasoning 
ran.  "  We  have  risked  our  money  and  devoted  our 
brains  to  the  enterprise.  We  want  all  we  can  get  out 
of  it.  What  price  will  we  charge?  We  will  fix  a 
price  just  below  the  cost  of  power  made  from  coal. 
That  will  give  us  the  business,  and  at  coal  prices." 

Monopolists  always  fix  prices  at  a  point  of  maximum 
advantage.  Costs  of  production  do  not  figure.  The 
rule  of  monopoly  price  is, — "  All  that  the  traffic  will 
bear." 

The  substitution  of  a  newly  discovered  advantage 
for  an  exhausted,  high-priced  resource,  will  result 
inevitably  in  a  price  fixed  by  the  monopoly  rule  so 
long  as  private  monopoly  is  permitted  to  continue. 
The  rule  is  easy  of  application.  Its  use  is  general. 
While  monopoly  of  resources  is  permitted,  no  material 
lowering  of  prices  can  be  looked  for  in  the  discovery 
of  new  resources  or  in  new  uses  for  old  ones.  Prices 
will  be  fixed  on  the  monopoly  basis. 

3.    THE  CONSERVATION  OF  TIMBER  LAND  AND 
OF  SOIL  FERTILITY 

The  conservation  of  timber  land  and  of  soil  fertility 
involves  science,  wise  use,  care,  and  maintenance. 
There  is  some  element  of  monopoly  in  the  timber 
supply,  yet  the  exhaustion  of  timber  at  a  rate  far  more 
rapid  than  the  rate  of  growth  necessarily  adds  to  its 
price. 

The  conservation  of  timber  land  is  a  problem  that 
may  be  solved  in  only  one  way, — by  reforestation  on  a 


252       KEDUCING  THE  COST  OF  LIVING 

sufficient  scale  to  provide  for  the  normal  lumber  de- 
mand. The  price  of  lumber  will  be  high  in  the  future. 
None  of  the  substitutes  that  have  been  discovered, 
none  of  the  changes  in  building  methods,  has  seriously 
decreased  the  demand  for  lumber.  Only  when  forestry 
becomes  a  business  ;  only  when  reforestation,  public  or 
private,  is  resorted  to  as  an  investment,  will  an  effective 
check  be  put  upon  rising  timber  prices. 

Aside  from  assuring  a  stable  supply  of  lumber,  re- 
forestation will  supply  a  covering  for  the  hills.  The 
traveler  through  the  once  thickly  wooded  mountainous 
districts  of  the  United  States  is  impressed  by  the  im- 
mense extent  of  barren,  brush-covered  hillside,  which 
affords  a  ready  foothold  for  the  fires  that  sweep  across 
the  country,  damaging  or  destroying  whatever  young 
timber  there  is,  and  burning  the  dead  leaves  and  dry 
moss  which  are  scattered  about.  Forest  fires  are  in 
themselves  often  disastrous.  It  is  estimated  that  during 
the  past  hundred  years  the  quantity  of  good  timber 
destroyed  by  fire  in  the  United  States  has  been  as 
great  as  the  quantity  used  by  men.  Numerous  lives 
have  been  lost,  and  whole  villages  overwhelmed. 
Scientific  care  of  the  forests  would  eliminate  much 
of  this  waste,  and  prevent  such  disasters. 

Even  more  persistent  than  the  forest  fires  are  the 
floods  which  occur  year  after  year.  The  hills  at  the 
headwaters  of  streams  are  depleted  of  timber ;  fires 
burn  off  the  leaves,  moss,  and  decaying  twigs  ;  the 
ground,  left  hard  and  bare,  sheds  the  spring  rains  like 
a  duck's  back.  Instead  of  soaking  into  the  spongy 
mass  of  vegetable  matter  on  the  forest  floor,  and  filter- 
ing gradually  into  the  springs,  the  rain  runs  at  once 


CONSERVATION  AS  A  MEANS  253 

into  the  streams.  For  a  month  there  are  floods,  doing 
damage  to  the  extent  of  millions,  or  hundreds  of  mil- 
lions. Then  August  and  September  come.  The  hills 
are  parched,  the  springs  and  wells  in  the  valleys  are 
empty,  and  drought  plays  havoc  with  hills  and  valleys 
alike.  Flood  and  drought  follow  logically  in  the  train 
of  bad  methods  of  forestry. 

The  argument  for  reforestation  and  conservation  of 
timber  lands  is  too  logical  and  too  trite  for  restate- 
ment ;  yet  the  fires  and  floods  rage,  and  the  American 
forest-conservation  policy  is  still  in  its  infancy. 

The  conservation  of  soil  fertility  is  even  simpler  than 
forest  conservation.  The  only  prerequisite  for  the  con- 
servation of  soil  fertility  is  wise  farming. 

The  soil  gives  to  plants  certain  food  elements, — ni- 
trogen, phosphorus,  potash,  carbon,  and  the  like.  It 
likewise  provides  the  medium  in  which  plants  may 
grow.  This  medium  is  a  soil  open  and  light  enough 
to  receive  the  tiny  rootlets,  and  sufficiently  spongy  and 
porous  to  retain  a  water  supply.  The  most  important 
source  of  both  plant  foods  and  of  good  soil  tilth  alike 
is  humus. 

Humus  is  vegetable  matter  in  the  process  of  decay. 
It  serves  a  double  purpose.  The  disintegration  of  the 
vegetable  matter  supplies  nutritive  elements  for  the 
plants ;  the  humus  loosens  up  the  soil,  keeping  it  light 
and  friable.  No  application  of  mineral  fertilizer,  and 
no  amount  of  soil  cultivation  will  make  up  for  a  short- 
age of  humus.  It  is  an  absolute  essential  to  soil  well- 
being. 

The  prophets  of  evil  who  predict  soil  exhaustion  find 
a  negation  of  their  teachings  in  the  possibilities  of  re- 


254       BEDUCING  THE  COST  OF  LIVING 

placing  humus  in  the  soil.  Only  recently  have  agri- 
culturalists come  to  appreciate  the  full  advantages  of 
cover  crops, — green  crops,  usually  of  some  legume  such 
as  soy  beans,  vetch,  and  cow  peas,  which  are  sowed  to 
be  plowed  under.  Some  of  these  crops  produce  a  gen- 
erous growth  of  leaves  and  stalks.  All  of  the  legumes 
have  on  their  roots  small  deposits  of  nitrogen  (nodules), 
which  add  to  the  nitrogenous  plant  food  in  the  soil. 
An  interplanting  of  cover  crops  with  standard  crops 
(for  example,  vetch  or  soy  beans  between  corn  at  the 
time  of  the  last  cultivation)  leaves  something  on  the 
soil  to  prevent  wash,  and  at  the  same  time  furnishes  a 
supply  of  humus  and  plant  food,  which  does  much  to 
maintain  the  soil  fertility. 

The  conservation  of  forests  and  of  soil  fertility  have 
ceased  to  present  serious  problems  to  the  scientist. 
Science  has  already  contributed  ample  assistance  in 
both  directions.  It  remains  for  society  to  follow  her 
behests,  and  the  excellent  example  which  certain  Eu- 
ropean countries  have  set  in  the  rehabilitation  of  for- 
ests and  the  restoration  of  soil  values. 

4.  THE  CONSERVATION  OF  WATER  EESOURCES 
Water  resources  cannot  be  destroyed.  Their  conser- 
vation becomes  a  matter  of  eliminating  monopoly,  and 
of  rendering  the  most  efficient  service  at  reasonable 
prices.  This  practice  already  obtains  in  the  case  of  gov- 
ernmental irrigation  projects  and  of  navigable  rivers. 
Time  alone  will  tell  whether  the  people  of  the  United 
States  are  sufficiently  far-seeing  to  apply  the  same  prin- 
ciple to  the  water-power  development  on  which  the 
future  will  so  largely  rely  for  its  mechanical  energy. 


CONSEBVATION  AS  A  MEANS  255 

The  chances  for  water-power  development  are  well- 
nigh  limitless.  With  the  instance  of  power  develop- 
ment mentioned  in  a  previous  section,  contrast  the  de- 
velopment of  navigation  in  harbors  and  in  navigable 
rivers.  The  government  sluices,  dredges,  and  regulates. 
The  country  pays  the  cost  of  the  business.  The  service 
is  of  high  quality,  well  rendered.  Its  cost  is  slight. 

Suppose  for  a  moment  that  a  private  corporation  had 
owned  the  New  York  Harbor  and  the  Hudson  for  the 
past  century.  Each  improvement  made  would  have 
been  capitalized  and  entered  as  investment.  Each 
service  would  be  charged  for,  not  at  its  cost,  but  on  a 
basis  that  would  pay  dividends  on  the  capitalization  of 
improvements.  The  commerce  entering  and  leaving 
New  York  would  be  held  in  the  grip  of  a  monopoly 
which  would  exact  i(  all  that  the  traffic  will  bear." 
The  result  would  be  an  increase  in  the  price  of  every 
commodity  which  entered  or  left  New  York  Harbor. 

The  issue  is  an  issue  between  investment  for  profit 
and  monopoly  for  profit  on  the  one  hand,  and  service 
on  the  other.  The  aim  of  the  private  enterprise  is  to 
pay  dividends.  The  aim  of  the  government  is  to  ren- 
der service. 

There  is  probably  no  man  of  commercial  experience 
who  would  advocate  private  ownership  and  control  of 
New  York  Harbor.  The  advantages  of  public  control 
are  too  obvious  and  too  well  established.  The  dangers 
of  private  manipulation  are  too  vast.  The  experience 
of  the  United  States  with  the  reclamation  projects  in  the 
West  has  been  of  a  similar  nature.  The  government 
reclamation  service,  under  efficient  management,  has 
performed  miracles  of  engineering  skill,  turning  whole 


256       BEDUCING  THE  COST  OF  LIVING 

rivers  from  their  channels,  and  converting  thousands 
of  acres  of  desert  into  fertile  orchards  and  fields.  This 
work  has  been  done  at  cost.  No  monopoly  price  has 
been  exhorted.  None  of  the  burdens  of  inflated  values 
have  been  heaped  upon  the  buyers  of  the  land.  They 
have  taken  it  at  the  cost  of  building  and  maintaining 
the  irrigation  system. 

The  issue  which  the  United  States  faces  in  the  devel- 
opment of  water-power  sites  is  similar  in  many  respects. 
The  coal  supply  is  being  gradually  depleted.  More 
and  more  of  the  power  used  in  American  industry  will 
be  derived  from  water.  Shall  this  power  be  paid  for 
at  cost  or  shall  its  price  be  set  by  the  monopoly  formula 
"  all  that  the  traffic  will  bear"?  The  issue  is  clearly 
drawn  between  private  profits  and  public  service. 

5.  THE  STATE  AS  A  CONSSEVATOB 
Conservation  is  a  long-time  investment.  An  in- 
dividual may  reap  the  benefits  of  soil  conservation. 
He  will  scarcely  live  to  see  the  results  of  forest  con- 
servation, nor  is  he  affected  in  any  marked  degree  by 
the  conservation  of  mineral  resources.  As  an  individ- 
ual, he  is  powerless  to  prevent  water-power  monopoly. 
Conservation,  concerned  as  it  is  with  long  periods  of 
time,  and  great  bodies  of  people,  is  a  social,  and  not 
an  individual  problem.  The  state  must  therefore  act 
as  chief  conservator. 

The  democratic  state  is  the  embodiment  of  group 
life  and  group  activity.  The  citizens  delegate  powers 
to  their  government,  and  look  for  service  in  return. 
The  state  exists  as  a  means  of  enhancing  the  general 
welfare  of  the  community. 


CONSERVATION  AS  A  MEANS  257 

The  state  does  not  live  in  one  generation,  as  does  the 
individual  citizen.  Citizens  come  and  go.  The  state 
remains.  Citizens  have  varied,  and  often  conflicting, 
interests.  The  function  of  the  state  is  to  act  in  the  in- 
terest of  all.  Therefore  it  is  peculiarly  fitting  that 
the  state  should  deal  with  a  problem  like  conservation 
which  is  in  every  sense  a  social  problem. 

The  possibilities  of  conservation  are  immense. 
They  cover  that  entire  range  of  activity  which  is  en- 
gaged in  taking  wealth  out  of  the  earth.  Since  these 
are  the  occupations  in  which  the  greatest  price  increases 
have  occurred  during  the  past  two  decades,  conserva- 
tion offers  a  means  for  checking,  or  at  least  modifying, 
price  increases,  in  so  far  as  they  affect  the  products  of 
land.  This  is  peculiarly  true  in  the  case  of  a  monopoly 
like  that  over  water-power  sites.  Left  to  themselves, 
the  water-power  owners  will  charge  a  price  slightly 
below  the  price  of  coal  power, — a  price  equal  to  "  all 
that  the  traffic  will  bear."  If  the  people  at  large  are 
to  benefit  by  such  improvements,  prices  based  on  the 
cost  of  production,  and  not  on  monopoly  power,  must 
prevail. 

The  individual  states  can  play  the  leading  r61e  in 
the  conservation  of  agricultural  lands.  Agricultural 
high  schools  and  colleges,  extension  work  in  agricul- 
ture, agricultural  experiment  stations,  and  publica- 
tions dealing  with  agricultural  problems,  will  naturally 
raise  the  standard  of  agriculture.  The  Federal  govern- 
ment will  continue  to  be,  as  it  has  been  in  the  past,  a 
patron  of  agricultural  education  and  activity.  Each 
state  can,  however,  carry  a  large  share  of  this  burden. 

The  conservation  of  mineral  resources,  the  regulation 


258       EEDUCING  THE  COST  OF  LIVING 

of  resource  monopoly,  and  the  reforestation  of  deforested 
areas,  likewise  fall  within  the  scope  of  state  activity ; 
but  here  the  Federal  government  will  unquestionably 
be  called  upon  to  enter,  because  of  the  failure  of  some 
states  to  provide  adequate  means  of  conservation. 
This  will  be  true  particularly  in  the  case  of  re- 
forestation, and  the  control  of  water-power,  both  of 
which  are  interstate  in  their  influence,  and  both  of 
which  many  states  have  signally  failed  to  understand. 
During  decades  and  generations  conservation  may 
work  wonders  in  price  regulations.  As  a  long-term 
investment,  however,  it  falls  logically  within  the  prov- 
ince of  society,  rather  than  of  any  individual  citizen. 


XXII 
INCREASING  THE  EFFICIENCY  OF  LABOR 

1.    WHAT  is  LABOB  EFFICIENCY  ? 

INCBEASED  efficiency  is  a  term  which  conveys  the 
idea  of  securing  a  given  return  with  a  lessened  outlay, 
either  of  labor,  of  capital,  or  of  some  other  factor  in- 
volved in  the  productive  process.  Increased  efficiency 
means  increased  facility  in  arriving  at  a  desired  result. 
Efficiency  is  conservation  of  effort. 

The  ways  in  which  efficiency  may  be  increased  are 
innumerable.  From  the  computing  machine,  which 
makes  easier  and  more  certain  the  procuring  of  mathe- 
matical results,  to  the  chilled  steel  plow,  which  raises 
the  standard  of  agricultural  production,  the  standard 
of  efficiency  is  being  constantly  raised. 

Can  labor  efficiency  be  increased  f  Can  science,  ap- 
plied to  man's  productive  efforts,  accomplish  results 
similar  to  those  which  have  followed  the  application 
of  scientific  methods  to  the  training  of  athletes  ?  The 
answer  seems  to  be  unanimous  in  the  affirmative. 
Men  can  be  made  more  efficient  if  they  learn  to  apply 
their  energies  scientifically.  Modern  productive  en- 
terprises are  carrried  on  largely  with  the  aid  of  ma- 
chinery. The  character  of  the  tools  which  labor  uses 
very  largely  determined  the  efficiency  of  the  labor. 
Combined  with  well-directed  physical  energy,  per- 
fected mechanical  appliances  serve  to  increase  the 
efficiency  of  labor  in  production. 


260       REDUCING  THE  COST  OF  LIVING 

For  the  purpose  of  the  present  discussion,  attention 
will  be  centered  upon  the  increasing  efficiency  of  phys- 
ical energy.  The  important  steps  which  the  past  has 
taken  in  the  improvement  of  mechanical  efficiency 
have  resulted  in  marked  savings.  Almost  all  cases  of 
price  reductions  during  the  past  twenty  years  are 
traceable  to  improvements  in  methods  of  manufacture, 
— to  increase  in  labor  efficiency.  The  progress  of  the 
nineteenth  century  was  based  primarily  upon  the  in- 
creasing efficiency  of  labor  in  production. 

The  development  in  mechanical  appliances  and 
methods  may  be  traced  to  one  of  two  sources.  On  the 
one  hand,  scientists,  working  in  the  laboratory,  have 
evolved  more  effective  methods  of  doing  things;  on 
the  other  hand,  mechanics,  at  work  in  industry,  have 
improved  and  perfected  mechanical  devices.  There- 
fore, an  increase  in  knowledge  and  in  skill  may  be 
looked  to  as  a  source  for  further  increasing  the  effi- 
ciency of  labor. 

2.  EFFICIENCY  THROUGH  KNOWLEDGE  AND  SKILL 
The  whole  world- wide  movement  for  better  tech- 
nical education  has  as  its  object  an  increase  in  the 
knowledge  and  skill  of  labor.  Trade  schools,  tech- 
nical high  schools,  agricultural  and  mechanical  col- 
leges, manual  training  in  the  grades,  are  all  aimed  at 
the  same  general  goal.  There  is  another  side  to  the 
question, — the  individual  wishes  to  improve  his  tech- 
nical ability  and  equipment  before  taking  up  his 
special  line  of  work.  Pursuant  of  this  desire,  he 
calls  upon  the  school  to  furnish  him  with  a  course  that 
will  increase  his  efficiency. 


INCREASING  EFFICIENCY  OF  LABOR    261 

The  desire  of  the  employer  or  of  the  prospective 
employee  for  technical  training  finds  expression  in  the 
increasing  emphasis  which  the  world  of  industry  is 
placing  upon  educational  attainments.  In  certain 
branches,  such  as  engineering,  college  men  are  given 
the  preference.  Indeed,  great  projects  like  the  New 
York  Subway  and  the  Panama  Canal  have  been  built 
by  college  trained  engineers.  Some  employers,  find- 
ing men  in  the  ranks  who  display  the  ability  of 
leadership,  send  them  to  college  and  pay  the  bills. 
Numerous  plants  maintain  schools  in  which  their  em- 
ployees are  taught  the  technique  of  the  business. 
This  is  as  true  of  department  stores  as  it  is  of  machine 
shops.  As  specialization  increases,  there  is  an  in- 
creased insistence  on  knowledge  and  skill,  which 
make  up  so  large  a  part  of  industrial  efficiency. 

The  demand  for  increased  knowledge  and  skill  is  a 
demand  that  applies  with  peculiar  force  to  the  com- 
paratively small  group  of  higher  class  workers.  There 
remains  that  great  body  of  semi-skilled  and  unskilled 
men  and  women  who  make  up  the  rank  and  file  of  in- 
dustry. For  them  the  chief  efficiency  requisite  is  good 
health. 

3.    EFFICIENCY  THROUGH  IMPROVED  HEALTH 
The  necessity  for  good  health  is  omnipresent.     No 
class    of   workers    can    afford  anything  less.     High 
skilled  and  low  skilled  alike  are  affected  by  it,  yet  it 
is  among  the  low  skilled,  where  health  and  bodily 
vigor  are  the  chief  asset,  that  health  is  most  imper- 
atively needed. 
Innumerable  estimates  have  been  made  concerning 


262        KEDUCING  THE  COST  OF  LIVING 

health  in  the  United  States.  The  Committee  of  One 
Hundred  on  National  Health  recently  went  over  all  of 
the  ground,  rounded  out  an  elaborate  study  and  pub- 
lished it  in  summary  form.1  There  is  no  doubt  that 
ill  health  is  a  serious  menace  to  efficiency.  On  the 
one  hand,  fatigue,  due  to  over- exertion,  fills  nerve 
centers  and  muscle  tissue  alike  with  poison.  On  the 
other  hand,  the  germs  of  disease  fasten  themselves 
eagerly  upon  the  system  thus  poisoned  with  fatigue. 
Those  who  are  suffering  from  over-fatigue,  resulting 
in  devitalized  systems,  from  severe  forms  of  sickness, 
and  from  minor  ailments,  number  many  millions. 

The  logical  outcome  of  this  prevalence  of  over- 
fatigue  and  of  disease  is  premature  death.  The  Com- 
mittee of  One  Hundred  estimates  that  in  a  given  year 
about  half  of  the  deaths  in  the  United  States  are  "pre- 
mature." That  is,  they  are  due  to  causes  over  which 
society  has  a  potential  control  which  it  has  failed  to 
exercise. 

The  effects  of  premature  death  upon  efficiency  are 
threefold.  First,  premature  death  eliminates  from 
the  community  large  numbers  of  men  and  women  on 
whom  society  has  expended  training  and  effort.  These 
are  eliminated  before  they  have  an  opportunity  to 
render  a  return  proportionate  to  the  outlay  of  energy 
involved  in  giving  them  their  training.  Second,  as 
men  and  women  advance  in  life  they  become,  in  most 
cases,  constantly  more  valuable  to  society.  The  years 
between  forty  and  sixty  should  yield  a  maximum  of 
service.  Third,  the  loss  by  a  family  of  the  wage 

lu  National  Vitality,"  Irving  Fisher,  Washington  Government 
Printing  Office,  1909. 


INCREASING  EFFICIENCY  OF  LABOE    263 

earner  involves  a  potential  or  actual  family  dissolution 
that  bears  rigorously  upon  the  children.  Perhaps  they 
are  forced  to  leave  school  and  to  work.  Perhaps  they 
are  underfed.  Perhaps  they  are  placed  in  institutions 
or  in  strange  families.  In  any  case  the  efficiency  of  the 
next  generation  is  menaced. 

4.    MAKING  IT  WORTH  WHILE  FOE  LABOR 
TO  BE  EFFICIENT 

There  can  be  no  serious  question  but  that  improved 
health  together  with  increased  skill  and  knowledge 
are  making  for  greater  efficiency.  Another  question 
of  serious  importance  arises.  Is  it  worth  while  for 
labor  to  be  efficient  ? 

From  many  sides  a  note  of  alarm  has  been  sounding. 
American  labor  is  soldiering  !  The  men  and  women 
do  just  as  little  as  they  are  compelled  to  do  in  order  to 
hold  their  jobs.  They  are  trying  to  get  the  most  pay 
they  can  for  the  least  work.  They  are  grafting  on 
their  employers. 

No  one  familiar  with  industry  can  deny  the  truth,  or 
semi -truth  of  some  of  these  statements.  The  "some- 
thing-for-nothing  "  spirit  has  taken  firm  hold  of  many 
phases  of  American  life.  From  the  boards  of  directors 
to  the  common  laborers,  from  the  governor's  chair  to 
the  door- tender's  stool,  the  graft  spirit  has  been  found. 
In  the  professions  and  in  commercial  fields  it  may  be 
pointed  out.  There  are  time-servers  in  every  walk 
of  life.  Labor  has  no  monopoly  of  the  practice. 

The  developments  of  present  day  industry  have  re- 
sulted in  a  specialization  and  a  stratification  of  jobs 
which  present  a  very  discouraging  aspect  to  the  be- 


264       REDUCING  THE  COST  OF  LIVING 

giimer  in  industrial  life.  A  new  set  of  books  is  intro- 
duced. The  old  bookkeeper  at  two  thousand  is 
replaced  by  a  new  man  at  twelve  hundred,  who  ac- 
complishes the  same  result.  A  machine  is  invented. 
An  unskilled  man,  guiding  the  work  of  the  machine, 
replaces  a  highly  skilled  mechanic.  A  high  salaried, 
experienced  man  is  removed  and  a  man  just  out  of 
college  takes  his  place  and  installs  a  system.  The 
room  at  the  top  is  narrowing.  There  is  scarcely  an 
important  industry  in  the  United  States  in  which  the 
proportion  of  superintendents,  managers  and  general 
officers  on  the  one  hand,  to  clerks  and  wage- earners  on 
the  other,  is  over  five  in  a  hundred.  There  are  a  num- 
ber of  industries  in  which  the  number  of  officers  bears 
an  even  smaller  relation  than  one  per  cent.  The  rail- 
road industry,  for  instance,  reports  one  general  officer 
for  each  three  hundred  employees.  This  distribution 
of  jobs  has  been  worked  out  as  a  detail  of  industrial 
efficiency.  One  general  officer  is  sufficient  to  direct 
the  work  of  three  hundred  men.  What  incentive 
have  the  three  hundred  to  strive  for  that  one  job,  when 
299  are  sure  to  lose  out?  The  rewards  at  the  "top  " 
of  industry  are  so  remote  that  they  no  longer  appeal  to 
the  imagination  of  most  men. 

Scientific  management  is  lauded  as  a  boon  to 
industry.  In  one  sense,  it  is  a  boon,  because  it  in- 
creases output,  yet  a  reading  of  the  literature  published 
by  its  champions  fails  to  show  a  case  where  the  wages 
of  the  men  who  are  expending  more  effort  to  keep  the 
new  pace  are  increased  in  proportion  to  the  additional 
effort  expended.  In  most  cases,  indeed,  the  increase 
in  wages  is  but  a  tithe  of  the  increase  in  product. 


ESTCBEASING  EFFICIENCY  OF  LABOE    265 

Scientific  management  has  picked  up  lost  motion. 
That  is  well.  Scientific  management  has  eliminated 
unnecessary  processes.  In  so  far  it  is  worthy  of  com- 
mendation and  adoption.  On  the  other  hand,  scientific 
management  has  increased  the  demands  on  labor  energy 
without  a  corresponding  increase  in  remuneration.  To 
that  extent,  it  has  thrown  a  wet  blanket  on  increased 
efficiency. 

There  is  another  element  which  makes  workers  ques- 
tion the  worth -whileness  of  increased  efficiency.  The 
worker  in  modern  industry  is  never  paid  in  proportion 
to  his  production.  His  wage  is  fixed,  on  the  contrary, 
at  an  amount  which  is  the  equivalent  of  the  amount 
for  which  some  one  else  will  do  the  same  work.  An 
American  workman  is  earning  two  dollars  a  day.  A 
Slav  offers  to  do  the  same  work  for  a  dollar  and  a  half. 
If  he  is  equally  efficient,  his  offer  is  never  refused. 
That  fact  explains  the  frightfully  low  wages  paid  iu 
those  industries  where  immigrants  compete  with 
American  workmen.  The  "  piece  rate "  method  of 
payment  is  no  exception  to  this  statement.  The  piece 
rate  is  fixed  at  a  figure  which  will  enable  the  worker 
to  make  a  "  fair  wage," — that  is  a  wage  equivalent  to 
that  ordinarily  paid  for  similar  labor.  When  the 
worker  increases  his  output  to  a  point  where  he  makes 
more  than  a  "  fair  wage,"  the  piece  rate  is  cut. 

Efficiency  must  be  made  worth  while.  Stratification 
and  standardization  of  industry,  scientific  management, 
and  the  payment  of  wages  which  represent  cost  of 
replacement  rather  than  amount  of  product,  must  be 
so  modified  and  reshaped  that  the  worker  finds  an 
increasing  pay  envelope  corresponding  to  his  increas- 


266       EEDUCING  THE  COST  OF  LIVIKG 

ing  efficiency.  Unless  it  is  worth  while  for  labor  to  be 
efficient,  labor  efficiency  is  out  of  the  question.  When 
industry  makes  it  worth  while  for  labor  to  be  efficient, 
the  resulting  increase  in  labor  efficiency  will  prove  a 
vital  factor  in  decreasing  the  cost  of  living  in  the  case 
of  those  products  which  depend  largely  upon  labor  for 
their  production. 


XXIII 

INCREASING  THE  EFFICIENCY  OF 
EXCHANGE 

1.    A  MOKE  STABLE  MEDIUM  OF  EXCHANGE 

THE  increased  efficiency  of  exchange  would  un- 
doubtedly be  an  element  in  reducing  or  at  least  in 
stabilizing  the  cost  of  living.  A  complex  industrial 
and  commercial  society  depends  upon  the  medium  of 
exchange  for  the  measurement  of  its  values.  The 
medium  of  exchange  should,  above  all  else,  be  stable. 
Stability  is  as  essential  to  a  medium  of  exchange  as  is 
a  universal  recognition  of  its  value. 

Gold  is  the  medium  of  exchange  accepted  by  the 
commercial  world.  As  already  pointed  out,  the 
amount  of  gold  has  recently  increased  in  a  constantly 
growing  ratio,  thus  rendering  its  value  in  terms  of 
other  commodities  less  and  less. 

No  one  contends  that  gold  is  any  longer  a  stable 
medium.  Indeed,  it  might  be  described  as  relatively 
unstable.  The  exchange  of  the  world  is  being  carried 
on  through  the  use  of  a  medium  of  uncertain  value. 
The  remedy  is  obvious, — find  a  medium  which  will  be 
of  certain  value. 

Theoretically  it  is  easy  to  make  a  medium  of  cer- 
tain value.  Practically  it  is  almost  out  of  the  ques- 
tion. The  commodity  used  as  money  must  be  of 
intrinsic  value,  durable,  divisible  into  units,  and 


268       KEDUCING  THE  COST  OF  LIVING 

easily  transferable  from  place  to  place.  Gold  answers 
all  of  these  requirements.  It  fails  to  meet  the  addi- 
tional requirement  of  stability.  The  stability  require- 
ment is  a  wholly  impossible  one,  however.  The  sup- 
ply of  the  commodity  must  increase  as  the  demands 
of  business  increase, — no  faster  and  no  slower.  Discov- 
eries of  new  fields  or  of  new  processes  of  manufacture 
must  have  no  effect  in  suddenly  increasing  the  sup- 
ply. In  the  modern  world  of  commerce  and  scientific 
research,  such  a  situation  is  manifestly  impossible. 

Men  have  proposed  platinum  as  a  medium  of  ex- 
change. Platinum  would  satisfy  all  of  the  requirements 
that  gold  satisfies,  but  suppose  that,  at  the  end  of  the 
thirty  or  forty  years  necessary  to  persuade  the  com- 
mercial nations  that  it  should  be  adopted,  some  care- 
less scientist  were  to  discover  a  means  of  extracting 
platinum  that  would  double  the  supply  in  five  years  ! 
The  commercial  world  would  face  the  same  exigency 
that  it  now  faces  with  gold. 

The  difficulties  in  the  way  of  stabilizing  an  ex- 
change medium  seem  insuperable.  Unless  some  arti- 
ficial restrictions  are  placed  upon  the  supply,  no  com- 
modities can  ever  be  made  stable  as  a  medium  of 
exchange. 

2.  THE  CONTROL  OF  GOLD  MINES 
One  measure  is  suggested  that  might  effect  the  de- 
sired result.  The  government  might  control  all  of  the 
sources  of  the  gold  supply.  Such  a  suggestion  in- 
volves two  obvious  corollaries.  On  the  one  hand, 
since  the  sources  of  gold  supply  are  now  world -wide, 
there  must  be  an  international  agreement,  limiting  the 


THE  EFFICIENCY  OF  EXCHANGE        269 

supply  of  gold  taken  from  existing  mines.  An  even 
more  important  duty  than  the  control  of  the  present 
gold  supply  would  be  the  control  of  new  sources  of 
supply,  and  of  new  methods  of  extracting  gold  from 
ore. 

3.    A  COMPENSATED  DOLLAR 

The  attempts  to  secure  a  regulated  supply  of  gold 
are  based  on  the  supposition  that  the  quantity  of  gold 
produced  can  be  limited,  and  the  medium  of  exchange 
thus  standardized.  Such  a  scheme  might  work  ad- 
mirably so  long  as  the  potential  production  of  gold 
increased.  Suppose,  however,  a  time  to  be  reached 
at  which  the  demand  of  commerce  far  outran  the 
world's  possible  gold  supply.  An  international  com- 
mission might  conceivably  place  a  maximum  limit  on 
gold  production.  Over  the  minimum  limit,  Nature 
and  science  or  Nature  alone  presides.  When  the  gold 
supply  is  exhausted,  there  is  an  end  of  the  matter. 

This  difficulty  may  be  overcome,  insist  a  number  of 
economists,  by  coining  a  compensated  dollar.  This 
dollar  will  be  at  once  stable  and  elastic.  It  can  be 
made  large  or  small  as  the  case  demands. 

The  present  dollar  is  a  quantity  of  gold.  Congress 
has  declared  that  25.9  grains  of  gold  is  a  dollar.  No 
matter  how  plentiful  gold  may  be,  that  number  of 
grains  is  still  a  dollar.  The  advocates  of  the  compen- 
sated dollar  insist  that,  instead  of  fixing  the  quantity 
of  gold  in  the  dollar,  the  amount  should  be  flexible 
and  the  value  stable. 

The  dollar  would  be  made  flexible  or  compensated 
in  the  following  manner.  The  prices  of  some  fifty 


270       SEDUCING  THE  COST  OF  LIVING 

leading  commodities  would  be  compiled  and  a  stand- 
ard established  at  100.  In  the  course  of  six  months, 
this  average  price  or  index  number  shows  that  prices 
have  advanced  so  that  they  stand  at  101.  That  is,  an 
amount  of  goods  that  could  be  purchased  six  months 
ago  for  $100  now  requires  $101 ;  or,  an  amount  of 
goods  that  could  be  purchased  six  mouths  ago  for  2590 
grains  of  gold  now  requires  2615.9  grains  (an  increase 
of  one  per  cent.).  Very  well,  then,  comment  the  ad- 
vocates of  the  compensated  dollar,  place  259  thou- 
sandths of  a  grain  additional  gold  in  each  dollar. 
Then  one  hundred  dollars  or  2615.9  grains  of  gold 
would  buy  as  much  in  commodities  as  it  did  six 
months  previously. 

The  compensated  dollar  scheme  has  numerous  ardent 
advocates,1  who  insist  upon  its  validity.  It  is  open, 
however,  to  serious  objections.  First  the  value  of  a 
given  coin  would  never  be  definitely  ascertainable  ; 
second,  gold  must  be  recoined  each  time  the  dollar  was 
adjusted  ;  third,  it  would  necessitate  an  international 
agreement ;  fourth,  the  scheme  would  not  work  under 
falling  prices. 

The  first  two  objections  are  more  technical  than 
fundamental.  So  long  as  a  quantity  standard  of  money 
is  adhered  to,  it  would  seem  desirable  to  maintain  the 
quantity  in  a  given  coin  constant.  This  could  be 
accomplished  only  through  a  constant  recoining  of  all 
gold  coins.  The  technical  difficulties  involved  in  call- 
ing in  large  numbers  of  coins  is  practically  insurmount- 
able. For  months  after  the  standard  was  rear- 

1  "  A  Compensated  Dollar,"  by  Irving  Fisher,  Quarterly  Journal 
of  Economics,  Vol.  27,  Feb.,  1913. 


THE  EFFICIENCY  OF  EXCHANGE       271 

ranged,  there  would  be  two  grades  of  money  in  the 
community. 

Like  the  proposal  for  a  governmental  control  of  gold 
mines,  the  agreement  to  compensate  coinage  must  be 
international  in  order  to  be  effective.  Should  each 
government  have  a  commission  which  periodically 
changed  the  value  of  its  coinage,  international  exchange 
could  be  so  uncertain  as  to  be  impracticable.  Each 
transaction  would  be  made  subject  to  adjustments  in 
the  size  of  the  exchange  medium  in  the  two  countries 
between  which  the  transaction  took  place. 

The  plan  of  compensating  the  dollar  would  fail  with 
falling  prices.  So  long  as  prices  are  rising,  and  an 
increased  amount  of  gold  is  placed  in  each  successive 
dollar,  the  government  might  call  in  and  recoiu  the 
money.  Should  prices  be  falling,  however,  and  a  less 
amount  of  gold  were  placed  in  each  succeeding  dollar 
coined,  the  old  dollars  would  be  melted  privately  and 
sold  as  bullion,  because  in  that  form  they  would  com- 
mand more  than  a  dollar  in  the  new  coinage.  There 
seems  to  be  no  answer  to  this  objection. 

4.    FIAT  MONEY 

Adherence  to  a  quantity  standard  of  money  involves, 
either  in  the  case  of  gold  mine  control  or  of  a  com- 
pensated exchange  medium,  an  international  agreement 
to  make  the  plan  effective.  To  be  sure,  the  present 
unstable  basis  may  be  retained,  but  if  a  change  were  to 
be  made,  and  an  international  agreement  secured,  it- 
would  seem  more  sensible  to  abandon  quantity  money, 
particularly  in  view  of  the  fact  that  the  chief  argument 
in  favor  of  quantity  money  is  the  impossibility  of 


272       REDUCING  THE  COST  OP  LIVING 

persuading  all  commercial  nations  to  adopt  anything 
else.  If  the  nations  will  come  together  on  compensated 
coinage,  why  not  on  fiat  money  ? 

The  proposal  for  the  issue  of  fiat  money  is  not  new. 
The  question  may  pertinently  be  asked,  however,— 
"Have  the  commercial  nations  of  the  world  reached  a 
level  of  cooperative  intelligence  which  would  permit  of 
the  use  of  fiat  money  ?  " 

No  one  nation  can  issue  fiat  money.  In  the  course 
of  international  transactions,  any  nation  which  at- 
tempts such  a  plan  is  inevitably  worsted.  It  is,  how- 
ever, entirely  possible  for  the  commercial  nations  to 
organize  a  commission  on  international  trade,  em- 
powered to  issue  a  medium  of  exchange,  acceptable  at 
par  in  all  commercial  nations.  Instead  of  declaring 
that  so  many  grains  of  gold  is  a  dollar  or  is  a  sovereign, 
such  a  commission  would  stamp  on  a  piece  of  paper, — 
"This  is  a  dollar."  Thereafter  this  paper  would 
circulate  at  par  and  would  be  the  measure  of  all  values. 

The  use  of  fiat  money  presupposes  confidence  and 
intelligence.  The  training  which  the  use  of  checks  and 
drafts  is  giving  will  ultimately  provide  both. 

At  the  present  time,  the  commercial  transactions  of 
America  are  carried  on  by  means  of  orders  (checks  or 
drafts)  drawn  against  imaginary  bank  deposits.  If 
all  of  the  depositors  in  the  banks  of  the  United  States 
were  to  demand  their  money  the  day  after  to-morrow, 
the  great  majority  of  them  would  come  away  penniless 
because  the  law  compels  the  banks  to  carry  only  a 
small  percentage  of  deposits  in  cash.  The  rest  is  lent 
out,  or  converted  into  credit.  It  is  against  this  credit, 
— built  upon  no  more  stable  foundation  than  business 


THE  EFFICIENCY  OF  EXCHANGE       273 

integrity  and  confidence, — that  the  business  world 
draws  and  accepts.  The  step  is  not  long  from  private 
paper,  issued  and  accepted  on  "credit,"  to  an  inter- 
national paper,  issued  and  accepted  on  international 
credit  and  confidence. 

The  possibility  of  international  fiat  money  may  be 
immediate  or  remote.  It  is  becoming  increasingly 
clear  that  the  medium  of  exchange  will  not  be  finally 
stabilized  until  there  is  an  international  resort  to  fiat 
money. 

5.  PRIVATE  CREDIT  ASSOCIATIONS 
Private  banks  and  private  persons  will  continue  to 
extend  credit  until  credit  is  made  a  matter  for  govern- 
mental action.  Meanwhile,  it  is  extremely  important 
that  credit  in  certain  forms  be  more  generously  pro- 
vided. 

Private  banking  in  the  United  States  has  been  de- 
veloped to  a  point  which  permits  the  great  industrial 
enterprises  which  can  deposit  convertible  collateral 
(stocks,  bonds,  and  the  like)  to  secure  credit  to  any 
reasonable  extent.  At  the  same  time,  the  little  man, 
or  the  great  man  in  the  making,  finds  it  difficult  or 
impossible  to  secure  credit  extensions. 

A  small  business  man,  with  no  reputation  behind 
him,  either  good  or  bad,  finds  himself  in  a  business 
world  where  transactions  are  carried  on  by  means  of 
credit.  He  also  discovers  that  the  men  who  have 
made  a  success  in  business  have  no  difficulty  whatever 
in  securing  credit,  while  he,  as  a  beginner,  with  little 
backing  and  less  capital,  is  practically  shut  out  from 
credit  securing  possibilities.  Without  credit,  a  busi- 


274       KEDTJCING  THE  COST  OF  LIVING 

ness  man  is  helpless.  The  big  man  gets  credit  much 
more  readily  than  the  small  man.  Therefore  the  big 
man,  at  the  very  outset,  has  an  immense  advantage 
over  the  small  one.  His  previous  success  gives  him  a 
momentum  which  makes  competition  with  him  diffi- 
cult, or  impossible. 

The  situation  of  the  farmer  is  similar  to  that  of  the 
small  business  man.  His  only  collateral  is  his  land. 
Most  farm  land  is  a  drug  on  the  market,  valuable  so 
long  as  a  man  wishes  to  farm  it,  but  immensely  diffi- 
cult to  dispose  of.  Therefore  the  banks  hesitate  to 
extend  credit  on  so  unconvertible  a  piece  of  collateral 
as  a  farm  mortgage.  The  city  business  man  with  his 
rapid  turn  over  of  capital  and  his  readily  salable 
property  finds  himself  at  an  immense  advantage  over 
the  farmer. 

The  small  business  man  and  the  farmer  may  both  be 
assisted  through  cooperative  credit  associations.  In 
Germany,  France,  and  Italy,  these  associations,  fos- 
tered by  the  state,  have  done  much  to  facilitate  the 
extension  of  credit  among  men  of  small  means.  There 
seems  to  be  no  good  reason  why  they  should  not  be- 
come as  strongly  rooted  here  as  are  the  building  and 
loan  associations. 

6.    SOCIALIZING  CREDIT 

The  real  line  of  advance  seems  to  lie  in  the  social- 
izing of  credit.  Credit  is  to-day  in  a  position  similar 
to  that  occupied  by  money  three  centuries  ago.  Then 
money  was  the  medium  of  exchange.  Now  credit  is 
the  medium  of  exchange,  particularly  in  large  trans- 
actions. There  was  a  time  when  money  was  issued  by 


THE  EFFICIENCY  OF  EXCHANGE       275 

any  one  who  cared  to  coin  it.  To-day,  even  state 
banks  are  denied  the  right  to  issue  money.  Experi- 
ence showed  conclusively  that  money  must  be  issued 
by  a  central,  generally  recognized  authority. 

The  time  has  come  when  credit  is  the  generally  used 
medium  of  exchange.  Issued  by  private  agencies,  it 
is  subject  to  monopoly  and  abuse  of  various  kinds. 
There  seems  to  be  nothing  short  of  a  government  issue 
of  credit  which  will  finally  clear  the  commercial  at- 
mosphere, and  place  the  exchange  medium  on  as 
stable  a  foundation  as  that  now  occupied  by  govern- 
ment coinage. 

7.  INTERNATIONAL  MONEY  AND  CREDIT 
No  one  questions  the  desirability  of  securing  a 
stable  exchange  medium.  There  is  a  difference  of 
opinion  only  as  regards  the  method  of  achieving  this 
result.  The  discussion  in  the  present  chapter  leads 
inevitably  to  one  conclusion, — since  exchange  has  be- 
come so  largely  international,  and  since  all  proposals 
for  reorganizing  exchange  must  stand  the  test  of  their 
effect  upon  the  commercial  relations  existing  between 
various  nations,  that  therefore  the  medium  of  ex- 
change must  be  finally  adjusted  on  an  international 
basis. 

There  are  indications  that  with  the  increasing  inti- 
macy of  international  commercial  relations,  standards 
of  weights,  of  measures,  and  of  values  will  be  adjusted 
on  an  international  basis.  That  this  adjustment  will 
be  slow, — none  can  question.  That  it  is  inevitable 
seems  equally  obvious. 

An  increased  efficiency  of  credit  may  be  derived 


276       REDUCING  THE  COST  OF  LIVING 

either  through  private  credit  associations,  or  through 
a  socialization  of  credit  in  the  hands  of  the  central 
government  Both  methods  will  probably  be  adopted 
until  the  former  is  absorbed  by  the  latter.  Meanwhile 
stability  in  the  medium  of  exchange  can  best  be  se- 
cured through  international  agreement.  Such  an 
agreement  should  have  a  far-reaching  effect  in  bring- 
ing about  increased  price  stability. 


XXIV 

THE  BEDUCTION  AND  ELIMINATION  OF 
MONOPOLY  PEOFITS 

1.    WHAT  is  A  MONOPOLY  PROFIT  ? 

THERE  is  every  probability  that  simpler  living, 
self-service,  social  education  and  conservation  together 
with  the  increasing  efficiency  of  food  distribution,  of 
labor,  and  of  credit  and  banking,  will  materially  in- 
fluence the  cost  of  living.  All  of  these  avenues  call 
for  long  distance  views,  and  long  distance  statesman- 
ship. To  the  American  demand  "  be  quick  about  it," 
they  offer  little  consolation.  The  case  for  impetuosity 
is  not  lost,  however,  since  there  is  at  least  one  field  for 
immediate,  drastic  action.  That  field  is  none  other 
than  the  elimination  of  monopoly  profits. 

The  question  at  once  arises, — "  What  are  monopoly 
profits!" 

The  ordinarily  accepted  definition  reads  that  "mon- 
opoly profits  are  profits  over  and  above  those  which 
could  be  made  under  free  competition."  This  defi- 
nition in  terms  of  competitive  conditions  is  a  survival 
of  the  competitive  era.  During  this  era,  producers, 
by  competing  with  one  another,  lowered  the  price  of 
the  product  to  a  level  which  allowed  them  a  profit 
representing  a  return  for  risk  and  organizing  ability. 
There  was  always  more  productive  power  than  there 
were  consumers,  so  ran  the  theory.  If  productive 


278       EEDUCING  THE  COST  OF  LIVING 

power  was  short  in  any  direction,  the  rising  returns 
from  that  industry  would  attract  capital  and  enter- 
prise until  the  competitive  level  was  again  reached. 
Therefore  there  were  forces  constantly  at  work  driving 
prices  down  to  a  level  that  would  admit  of  a  profit 
equal  to  a  return  for  labor  and  risk. 

This  theory  of  competition  rendered  the  definition 
of  monopoly  profits  easy.  Any  profit  above  the  fair 
or  competitive  profit  was  a  monopoly  profit. 

2.  THE  PREVALENCE  OF  MONOPOLY 
The  economists  who  insisted  on  the  competitive 
basis  of  monopoly  profits  had  never  been  brought  face 
to  face  with  a  monopolistic  regime  like  that  now  domi- 
nating the  United  States.  Producers  have  waged  cut- 
throat wars  with  one  another,  until  experience  has 
taught  them  two  things.  First,  competition  might 
ruin  the  successful  as  well  as  the  unsuccessful  compet- 
itor. Second,  whoever  won,  the  consumer  and  not 
the  producer  was  the  beneficiary  of  the  competition 
regime. 

Competition  was  dangerous  in  the  extreme, — almost 
as  dangerous  to  the  successful  as  to  the  unsuccessful 
competitor.  Many  a  successful  man,  at  the  end  of 
a  price  war,  has  gazed  around  him  at  the  havoc  wrought 
by  the  struggle,  has  estimated  the  cost  in  health  and 
effort,  and  has  then  wondered  whether,  after  all,  it 
really  paid.  Certainly  it  did  not  pay,  in  business 
returns,  even  for  him.  It  had  ruined  the  man  who 
lost. 

The  consumer  liked  compel  ition  because  it  did  pay. 
A  price  war  meant  cheap  goods.  Competition  spelled 


MONOPOLY  PROFITS  279 

plenty  for  the  housewife.  Therefore  the  consuming 
public  was  an  ardent  supporter  of  the  competitive 
regime. 

3.  THE  BASIS  OF  MONOPOLY  POWER 
The  manifold  experiences  of  business  triumphs  and 
failures  combined  with  a  number  of  other  factors  to 
convince  the  producer  that  while  competition  might 
be  the  life  of  low  prices,  it  was  the  death  of  profits. 
He  sat  down  with  a  fellow  manufacturer  at  a  quiet 
luncheon,  and  whispered  this  idea  to  him  across  the 
table.  The  other  blushed  guiltily.  He,  too,  had 
reached  the  same  conclusion,  though  he  had  never 
dared  to  breathe  a  word  concerning  it.  The  little 
luncheon  gave  place  to  a  larger  one,  out  of  which  grew 
a  manufacturers'  association  ;  a  gentlemen's  agreement ; 
a  trust ;  or  a  combination.  The  idea  spread  like  wild- 
fire and  producers  began  to  take  care  of  themselves 
through  the  sure  channels  of  trade  cooperation  and 
organization. 

The  different  forms  of  cooperation  were  variously 
effective.  The  association  with  its  dinners  and  con- 
ventions gave  men  in  the  same  line  of  business  a  chance 
to  form  speaking  acquaintances  with  each  other.  The 
gentlemen's  agreement  bound  producers  loosely  to- 
gether. They  agreed  to  fix  prices ;  to  sell  only  certain 
lines  of  goods ;  to  sell  only  within  a  certain  territory, 
or  only  under  certain  conditions.  The  agreement  was 
unenforceable  at  law,  but  the  erstwhile  competitors 
had  seen  a  great  light.  They  realized  the  superiority 
of  cooperation  over  competition  and  kept  well  in  line. 
The  trust  and  the  combination  were  formal  and  legal. 


280       KEDUCING  THE  COST  OF  LIVING 

Great  funds  of  capital  were  aggregated  under  the 
direction  of  one  group  of  men.  Entire  industries  were 
brought  under  the  control  of  one  corporation.  Even 
though  there  was  no  monopoly  in  theory,  there  was 
no  longer  active  competition  in  practice.  Thus, 
through  a  series  of  "  get-together"  devices,  the  era  of 
competition  gave  place  to  the  era  of  cooperation  and 
combination. 

With  the  cessation  of  competition,  the  consumers 
found  themselves  face  to  face  with  a  pressing  necessity 
of  taking  care  of  themselves.  Prices  were  no  longer 
fixed  on  a  competitive  basis.  Some  prices  rose 
mightily.  Others  failed  to  decrease  in  proportion  to 
the  greater  efficiency  of  production.  The  consumers 
had  depended  for  price  regulation  on  a  cut-throat  war 
between  producers,  and  the  producers  had  declared  a 
more  or  less  permanent  peace. 

The  transition  from  competition  to  combination  led 
to  a  new  definition  of  monopoly  profits.  They  could 
be  estimated  no  longer  on  the  basis  of  a  competitive 
price  level,  because  there  was  no  competitive  price 
level.  Some  substitute  for  the  competitive  price  level 
was  necessary.  The  one  most  easy  to  apply  was  the 
"  cost  of  production."  Therefore,  at  the  present  time 
a  monopoly  profit  is  defined  as  a  profit  in  excess  of  a 
fair  return  on  the  actual  costs  of  conducting  the  busi- 
ness. 

The  difference  between  a  competitive  price  level 
and  a  cost  price  level  is  theoretically  very  small. 
Competitors  were  supposed,  by  their  competition,  to 
reduce  prices  to  a  point  where  they  yielded  only  a  fair 
or  reasonable  profit.  Those  who  advocate  the  fixing 


MONOPOLY  PEOFITS  281 

of  prices  on  the  basis  of  cost  insist  that  the  theory 
behind  competition  be  made  the  basis  for  regulation. 
Whenever  a  price  is  maintained  at  a  point  that  yields 
more  than  a  fair  return  in  the  actual  cost  of  conduct- 
ing a  business,  then  a  monopoly  profit  exists.  This 
definition  does  not  allow  a  business  to  first  capitalize 
its  earnings,  and  then  allege  the  charges  on  this  capi- 
talization as  one  of  the  costs  of  its  business.  Cost 
prices  are  figured  on  the  physical  valuation,  or  cost  of 
replacement  of  the  physical  property  of  the  business. 

Whatever  their  form,  industries  which  exact  more 
than  a  fair  profit  on  the  cost  of  production  are  in  pos- 
session of  monopoly  advantage.  Wherever  monopoly 
power  is  being  exercised,  there  is  an  opportunity  for 
a  reduction  of  the  cost  of  living  through  a  reduction  of 
monopoly  prices  to  a  cost  level. 

4.    LAND  OWNERSHIP 

Land  ownership  is  perhaps  the  greatest  single  mon- 
opoly with  which  society  must  grapple.  There  is  no 
sense  of  the  word  in  which  the  private  ownership  of 
land  is  not  monopolistic. 

Were  there  enough  land  to  go  around,  and  some  to 
spare,  land  ownership  would  be  in  no  sense  a  monopoly. 
Other  natural  gifts  like  air  and  sunshine  exist  in  such 
quantities  that  every  one  is  always  amply  supplied  with 
them.  Could  air  or  sunlight  be  monopolized  and 
limited  in  amount,  they  would  afford  a  monopoly 
power  as  great  as  that  of  land.  In  a  community  where 
there  are  more  people  who  want  a  piece  of  land  than 
there  are  pieces  of  land  to  go  around,  the  mere  title  to 
a  piece  of  land  enables  the  owner  to  put  a  price  on  it. 


282       EEDUCING  THE  COST  OF  LIVING 

He  may  own  a  sand  bar,  near  a  growing  summer 
resort,  or  a  farm  in  a  section  which  has  been  tapped  by 
a  railroad  line.  He  need  never  have  seen  the  land, 
much  less  improved  it.  His  mere  ownership  enables 
him  to  fix  a  price. 

The  monopoly  power  of  land  ownership  may  be 
seen  in  a  growing  city.  Near  the  commercial  center 
lies  a  vacant  lot.  Each  year  the  owner  of  that  lot 
learns,  from  the  assessor's  books,  and  from  the  sales 
of  neighboring  lots  that  his  land  has  increased  $100  in 
value.  His  taxes  and  interest  are  but  $50  a  year,  so 
that  the  rise  in  value  gives  him  a  clear  $50  monopoly 
profit.  One  day  a  storekeeper  offers  to  rent  this  lot 
for  twenty  years  and  put  a  store  on  it.  The  owner 
consents,  and  for  the  granting  of  that  privilege,  he 
receives  $1,000  a  year.  From  this  $1, 000  he  deducts 
interest  and  taxes.  The  remainder  is  monopoly 
profits. 

All  returns  which  come  from  land,  because  of  its 
location  or  because  of  its  natural  fertility  in  soil, 
minerals,  or  other  resources,  are  monopoly  returns. 
As  such  they  may  be  justifiably  eliminated. 

5.    FRANCHISES  AND  SPECIAL  GRANTS 
A  franchise  is  a  right,  given  by  society,  to  do  cer- 
tain things.     The  developments  of  the  past  few  dec- 
ades have  added  to  this  definition  the  further  pro- 
vision that  the  owner  of  the  franchise,  acting  within 
its  provisions,  may  use  the  franchise  right  to  exact  the 
highest  possible  price  for  the  service  which  he  renders. 
The  monopoly  power  granted  by  a  franchise  is  fre- 
quently absolute.     A  company  is  given  the  sole  right 


MONOPOLY  PROFITS  283 

to  lay  a  railroad  along  a  certain  street,  or  to  string 
wires  over  or  under  the  street,  or  to  supply  gas  or 
electricity  to  a  town.  These  public  utilities  are,  in 
their  very  nature,  monopolies.  It  does  not  pay  to 
duplicate  plants  or  services.  Competition  is  practi- 
cally out  of  the  question.  There  can  be  but  one 
means  of  judging  the  price  at  which  such  a  monopoly 
sells  its  product  to  the  consumers, — that  way  lies 
through  the  cost  of  the  service.  The  franchise  should 
not  be  capitalized.  It  is  merely  a  public  grant  of  a 
right  to  do  a  certain  thing.  The  cost  of  physical 
equipment  and  the  actual  cost  of  maintenance  alone 
enters  into  the  problem.  When  all  of  the  charges, 
which  legitimate  business  methods  lay  against  the 
receipts,  have  been  paid,  and  when  a  fair  profit  on 
the  physical  valuation  has  been  earned,  any  additional 
income  should  appear  in  the  reduced  cost  of  the  prod- 
uct. 

The  past  forty  years  have  witnessed,  in  the  United 
States,  a  wonderful  awakening  to  this  truth.  The 
last  generation,  wrapped  securely  in  its  confidence 
that  competition  was  the  well-spring  of  life  for  all 
business,  was  rudely  shocked  when  railroads  and  great 
industrial  corporations  ceased  to  compete,  and  began 
combining  in  the  interest  of  greater  profits.  It  was 
no  less  of  a  shock  to  find  that  all  forms  of  business 
which  were  operated  under  special  grants  of  power 
were  charging  not  competitive,  or  fair,  or  cost  prices, 
but  "  all  that  the  traffic  will  bear." 

The  reaction  against  franchise  monopoly  appears  in 
the  Interstate  Commerce  Commission  ;  the  State  Bail- 
road  and  Public  Utilities  Commission  :  and  the 


284       BEDUCING  THE  COST  OF  LIVING 

guarded  form  in  which  new  franchises  are  issued. 
Neither  Federal  nor  State  Commissions  will  have  com- 
pleted their  work  until  every  price  paid  by  the  public 
for  the  service  furnished  by  public  utilities  is  a  fair 
price,  based  on  the  actual  cost  of  producing  the  service. 

6.    PATENT  MONOPOLY 

Patent  monopoly  requires  but  a  word.  If  a  patent 
were  a  grant  by  means  of  which  an  inventor  re- 
ceived a  return  in  his  invention,  there  would  be  some 
justification  for  its  existence.  Theoretically,  a  patent 
is  such  a  grant.  Practically,  it  is  a  means  by  which 
capitalists  acquire  an  absolute  right  to  use  or  to  lay 
by  a  new  device  invented  by  a  clever  man,  and 
bought  over  by  them.  The  monopoly  power  which  is 
inherent  in  a  patent  enables  the  owner  of  the  patent 
(not  the  inventor)  to  charge  a  monopoly  price  for  his 
product. 

Patent  rights  there  should  be,  for  the  inventor.  He 
merits  some  return  for  his  labor.  That  fact  is  undis- 
puted ;  but  to  grant  to  a  great  industry  the  right  to 
tax  the  public  for  a  long  series  of  years,  simply  be- 
cause it  is  sufficiently  wealthy  to  buy  up  inventions,  is 
as  socially  disastrous  as  it  is  economically  ridiculous. 

No  one,  beside  the  inventor,  should  receive  any 
monopoly  returns  on  an  invention.  Where  costly  ex- 
perimentation has  preceded  the  final  perfection  of  a 
new  device,  the  price  should  be  fixed  accordingly. 
Never,  in  any  case,  should  a  patented  article  be  sold 
for  more  than  its  cost  of  manufacture  plus  a  fair  profit 
to  the  inventor  for  his  energy  and  investment.  Some 
inventors  will  consider  this  hard  doctrine,  yet  the  facts 


MONOPOLY  PEOFITS  286 

demand  no  less.  If  the  exorbitant  prices  frequently 
exacted  for  patented  articles  brought  wealth  to  the 
coffers  of  the  inventor,  there  might  be  some  justifi- 
cation for  the  patent  monopoly,  but  the  vast  propor- 
tion of  profits  in  patent  monopoly  are  now  reaped  by 
the  owners  of  patent  rights.  When  war  is  declared 
against  monopoly,  bought  up  patent  rights  will  be 
among  the  first  objects  of  attack.  They  are  in  no 
sense  justified.  They  add  greatly  to  the  prices  neces- 
sarily paid  for  things.  They  convey  a  monopoly  ad- 
vantage of  the  most  expensive  type. 

7.  THE  MONOPOLY  OF  CREDIT 
The  pros  and  cons  of  the  "Money  Trust"  are  still 
fresh  in  the  public  mind.  The  facts  seem  to  be  that 
the  men  who  controlled  the  leading  financial  institu- 
tions of  the  East, — and  there  were  only  a  few  such 
men, — made  loans  to  those  who  "stood  right"  with 
them.  Outsiders  were  neglected  while  those  inside 
profited. 

The  monopoly  of  credit  is  inevitable  so  long  as 
credit  is  issued  by  private  agencies.  Bankers  falling 
in  line  with  other  men  of  affairs  have  "understand- 
ings." They  do  not  propose  to  compete,  because  they 
have  seen  too  much  of  the  disaster  that  follows  in  the 
wake  of  competition.  The  remedy  against  credit 
monopoly  lies  not  in  the  decentralization  of  credit,  but 
in  the  control  of  credit  issue  by  the  Federal  govern- 
ment. 

8.    INDUSTRIAL  MONOPOLY 

The  statement  was  made  in  a  previous  chapter  that 
the  industrial  trusts  or  monopolies  had  not  raised 


286       EEDUCING  THE  COST  OF  LIVING 

prices  materially.  It  seeins  to  be  equally  true  that 
these  monopolies  have  not  decreased  prices  in  propor- 
tion to  the  decreasing  costs  of  production.  Many  of 
the  great  industries,  particularly  those  which  own  or 
control  a  natural  resource,  have  reaped  enormous 
profits  from  their  monopoly  advantage. 

Already  public  opinion  has  been  crystallized  re- 
garding industrial  monopoly.  There  seems,  for  this 
monopoly,  but  one  remedy, — the  appointment  of  a 
trade  commission,  or  of  trade  commissions,  with  power 
to  determine  what  constitutes  the  cost  of  production, 
and  to  fix  the  maximum  price  level  accordingly.  So 
long  as  industrial  monopoly,  complete  or  partial,  is 
allowed  to  endure,  so  long  will  it  be  impossible  for  the 
consumer  to  secure  the  products  of  such  industries  at 
or  near  their  costs  of  production.  The  sole  remedy 
seems  to  lie  in  price  fixing  on  a  cost  basis  or  in  absolute 
ownership  by  the  government. 

9.  THE  MONOPOLY  OF  PRODUCTIVE  TOOLS 
One  last  form  of  monopoly  remains  for  discussion, 
— the  monopoly  of  the  tools  of  production.  When  the 
artisan  used  simple  hand  tools,  a  monopoly  in  them 
was  out  of  the  question.  Now  that  the  tools  of  pro- 
duction are  social  in  their  nature, — railroads,  steam- 
ships, factories,  and  the  like, — representing  great  out- 
lays of  capital,  it  becomes  possible  to  monopolize  them, 
at  least  in  so  far  as  the  workers  are  concerned. 

A  child  born  into  the  family  of  a  cotton  weaver 
finds,  when  he  grows  old  enough  to  know  such  things, 
that  the  cotton  industry  in  his  section  of  the  country  is 
in  the  hands  of  a  small  group  of  men, — a  few  score  at 


MONOPOLY  PROFITS  287 

most, — who  own  the  factories  and  by  virtue  of  their 
ownership  are  able  to  exact  a  monopoly  return  in  the 
form,  of  interest  or  profits.  The  owners  of  the  pro- 
ductive machinery, — usually  called  stockholders  and 
bondholders, — secure  returns  for  ownership  alone. 
Without  exercising  any  concern  or  expending  any 
energy  or  effort,  they  are  enabled,  through  their 
titles  and  deeds,  to  take  a  part  of  the  products  of  the 
business. 

There  are  primitive  communities  in  which  interest 
is  a  return  for  abstinence  or  risk.  The  United  States 
has  developed  far  past  that  point.  There  are,  in  the 
United  States,  perhaps  a  hundred  billion  of  capital 
which  will  be  given  by  this  generation  to  the  genera- 
tion following.  By  virtue  of  the  ownership  of  this 
capital,  those  who  possess  it  may  tax  industry  at  the 
rate  of  five  or  six  per  cent,  on  their  holdings.  Here  is 
a  monopoly  advantage  of  the  first  order  which  will 
exist  as  long  as  the  private  ownership  of  the  tools  of 
production  continues. 

10.    GOVERNMENT  ACTIVITY  AND  THE  REDUCTION 
OF  MONOPOLY  POWER 

There  is  probably  no  single  way  in  which  the  costs 
of  living  could  be  more  speedily  reduced  than  through 
a  reduction  or  elimination  of  monopoly  power.  This 
reduction  cannot  be  made  by  a  return  to  competition, 
— a  return  to  competition  is  out  of  the  question, — but 
by  a  regulation  of  prices  in  relation  to  production 
costs. 

The  individual  is  powerless  to  effect  monopoly, 
hence  the  elimination  of  monopoly  profit  is  wholly  a 


288       EEDUCING  THE  COST  OF  LIVING 

matter  for  social  action.  Only  through  public  utilities 
commissions  ;  railroad  commissions  ;  trade  commis- 
sions; government  banking;  readjusted  patent  legis- 
lation ;  and  the  exercise  of  a  large  measure  of  control 
over  the  productive  machinery  itself  can  relief  be  ex- 
pected. 

These  suggestions  are  not  new.  Many  of  them  are 
now  in  the  making.  Public  utilities  and  railroad  com- 
missions have  been  organized  in  most  industrial  states  ; 
the  Federal  Trade  Commission  proposed  by  the  Demo- 
cratic Administration,  as  well  as  the  proposed  Federal 
ownership  of  telephone  lines  is  a  step  in  the  same 
direction.  There  are  more  steps  to  be  taken, — many 
more  steps,  in  fact, — before  the  monopoly  power  which 
is  now  exercised  in  the  fixing  of  prices  has  been 
eliminated.  Meanwhile  the  people  are  understanding 
more  clearly  with  each  passing  day  that  their  popular 
rights  can  never  be  safeguarded  so  long  as  monopoly 
is  lodged  in  private  hands. 


XXV 

BEADJUSTED  TAXATION 

TAXATION  is  a  means,  ready  at  hand,  whereby  the 
people,  acting  through  the  government,  may  enforce 
their  will  against  monopoly. 

Monopoly  power  can  be  reduced  most  effectively 
through  taxation.  There  is,  indeed,  no  other  means, 
save  direct  confiscation  or  direct  purchase,  by  which 
the  power  of  monopoly  can  be  promptly  effected. 

1.    UNEARNED  INCREMENT 

The  most  apparent  object  of  taxation  is  the  social 
value  represented  by  the  unearned  increment  in  laud. 
If  there  is  unearned  increment  or  unearned  returns 
anywhere,  it  is  the  return  from  increasing  land  values. 
Timber  lands,  farm  lands  and  city  lands  alike  report 
immense  increases  in  values.  The  increase  in  the 
timber  land  value  is  due  in  part  to  the  growth  of  the 
timber,  but  largely  to  the  increase  in  demand.  In- 
creased farm  land  value  and  city  land  value  is  due 
solely  to  the  increasing  demand  for  land. 

As  population  grows,  as  commerce  develops,  and 
business  becomes  more  highly  organized,  land  values 
increase  because  of  the  increasing  demand  for  land. 
This  increase  due  to  the  presence  and  activity  of  society, 
— this  increment,  unearned  by  the  holder  of  the  land, 
— is  the  source  of  the  constant  rise  in  land  values.  As 


290       KEDUCING  THE  COST  OF  LIVING 

generation  follows  generation  land  values  will  continue 
to  rise  in  the  United  States  until  a  point  of  maximum 
return  is  reached,  or  until  society  takes  the  increase 
through  land  taxation.  With  such  taxation,  any 
increase  in  demand  would  be  at  once  converted  into 
increased  taxes. 

Land  ownership  is  the  greatest  single  monopoly  in 
the  United  States.  Land  taxation  is  the  most  pressing 
of  all  reforms  for  the  reduction  of  monopoly  power. 

Every  progressive,  who  sees  social  progress  in  in- 
creasing prosperity  and  in  more  advanced  forms  of 
social  justice,  is  brought  face  to  face  with  the  land 
problem.  The  land  was  not  made  by  any  individual, 
but  was  here,  when  the  human  race  appeared.  The 
fertility  that  lies  in  the  land, — the  plant  food,  coal, 
iron,  copper  and  water  power,  — are  the  result,  not  of 
individual  effort,  but  of  natural  processes.  The  desir- 
able location  of  certain  pieces  of  land,  in  proximity 
to  commercial  centers,  is  the  result  of  the  presence  and 
growth  of  society.  An  individual  may  justly  lay 
claim  to  the  products  of  his  own  hands.  Whatever 
he  receives,  in  addition  to  that  amount,  he  receives 
from  nature's  bounty,  or  from  society's  activity  and 
growth.  To  neither  natural  fertility  nor  to  social 
values  has  the  individual  any  justifiable  claim.  If  the 
laud  belongs  to  any  one,  it  belongs  to  the  group.  If 
land  values  belong  to  any  one,  they  belong  to  the 
group  which  created  them.  The  case  seems  clear. 
Laud  values  are  social  values,  and  as  such  should  be 
absorbed  by  land  taxation. 

The  converse  of  the  proposition  is  also  true.  Men 
should  receive  a  return  for  effort  expended.  There- 


EEADJUSTED  TAXATION  291 

fore  they  are  entitled  to  the  products  of  the  activity 
on  the  land,  or  the  use  of  the  laud.  Laud  values  are 
social.  Improvement  values  are  individual  values. 

2.    TAXING  LAND  VALUES 

The  city  which  aims  to  reduce  monopoly  profits 
from  land  ownership  must  begin  by  making  a  separate 
assessment  of  land  and  of  buildings  and  other  improve- 
ments on  laud.  The  improvements  should  be  exempt 
from  taxation.  The  land  alone  should  be  taxed.  By 
this  means,  the  product  of  men's  efforts  goes  free. 
Taxes  are  levied  upon  the  land,  in  the  making  of 
which  man  played  no  part. 

Incidentally,  the  removal  of  a  tax  on  improvements 
and  the  imposition  of  a  tax  on  land  alone  should  re- 
sult in  a  material  increase  in  improvements.  Tax- 
ation always  discourages  the  production  of  the  thing 
taxed.  Land  cannot  be  discouraged. 

The  tax,  levied  on  city  laud,  should  be  placed  at 
a  figure  that  will  discount  all  present  or  future  land 
values.  The  object  of  the  tax  is  to  prevent  the  holder 
of  land  from  receiving  any  benefit  from  land  holding. 
For  improving  laud,  a  man  is  justly  entitled  to  the 
total  value  of  his  improvement.  For  merely  holding 
land,  he  should  receive  no  recompense.  The  tax 
should  be  readjusted  to  meet  the  increasing  demand 
for  a  given  piece  of  land.  As  demand  increases,  the 
tax  should  also  increase. 

A  municipal  land  tax,  placed  so  high  as  to  prevent 
an  individual  from  securing  returns  from  his  land 
ownership,  affords  perhaps  the  most  convenient  means 
for  regulating  rent,  an  item  for  which  the  ordinary 


292       EEDUCING  THE  COST  OF  LIVING 

city  family  spends  from  one-sixth  to  one-fourth  of  its 
income.  Laud  taxes,  making  landlordism  unprofitable, 
will  eliminate  those  laud  values  which  now  result  from 
speculation,  at  the  same  time  that  they  convert,  for 
public  uses,  the  values,  resulting  from  a  legitimate  de- 
mand for  laud. 

The  land  tax  problem  of  the  state  is  a  horse  of 
another  color.  For  the  most  part,  the  land  outside 
of  cities  and  their  immediate  environs  is  valuable  be- 
cause of  its  fertility,  rather  than  because  of  its  location. 
Nature  has  endowed  the  ground  with  value  for  farm- 
ing, lumbering,  or  mining.  The  sum-total  of  these 
natural  endowments  should  be  taxed  at  their  full 
value. 

The  valuation  of  state  land  is  no  easy  work.  The 
values  of  mineral  lands  are  particularly  difficult  of 
estimate.  Timber  land  values  and  farm  land  values 
may  be  determined.  Whatever  the  difficulty  of  assess- 
ment, the  object  remains  the  same  as  in  city  land, — 
the  elimination  of  monopoly  profits. 

3.  INCOME  AND  INHERITANCE  TAXES 
The  income  and  inheritance  tax  have  both  been 
adopted  as  a  means  of  taking,  for  the  use  of  the  state, 
a  portion  of  the  wealth  accumulated  by  the  individuals 
who  pay  the  tax.  In  neither  case  is  there  any  assur- 
ance that  the  tax  is  directed  against  monopoly  profits. 
The  income  tax  is  peculiarly  ineffective.  One  man 
has  in  his  possession  property  holdings  which  give 
him  a  return  of  $10,000  a  year.  Another  man,  in  pro- 
fessional life,  earns  $10,000  a  year  as  an  attorney  or 
surgeon.  The  same  income  tax  is  ordinarily  imposed 


EEADJUSTED  TAXATION  293 

on  both  men.  The  income  tax  therefore  operates 
against  income  as  income,  without  any  regard  to  the 
source  from  which  it  is  derived. 

Inheritance  taxes  are  directed  against  inheritance  in 
any  form.  However,  they  serve  a  purpose  essentially 
different  from  that  served  by  the  income  tax. 

Upon  the  death  of  an  individual,  property  passes, 
under  the  law,  either  in  accordance  with  the  pro- 
visions of  the  will,  or  else  in  accordance  with  certain 
well  recognized  legal  formulas.  In  either  case,  it 
gives  to  the  beneficiaries  property  titles  .which  enable 
them  to  exact  a  return  from  society.  There  is  an  es- 
sential difference  between  the  situation  of  the  man 
who  gains  property  by  his  own  exertions,  and  the 
man  who  has  property  handed  to  him  by  another. 
The  latter  man  really  secures,  without  effort  on  his 
part,  a  power  to  tax  the  community. 

Whenever  inheritance  is  discussed,  the  most  robust 
man  in  the  company  always  raises  a  plea  for  widows 
and  orphans.  Certainly  they  should  be  considered. 
Ample  provisions  should  unquestionably  be  made,  out 
of  an  estate,  for  the  comfort  of  the  widow  during  her 
life,  and  for  the  education  of  the  orphans.  That  has 
nothing  at  all  to  do  with  the  general  proposition  of 
inheritance,  nor  is  it  in  any  sense  an  argument  against 
the  operation  of  a  high,  progressive  inheritance  tax. 

4.    THE  FIELD  OF  TAXATION 

The  object  of  taxation  is  twofold.     First,  the  tax 

must  provide  sufficient  revenue  for  the  maintenance  of 

the  state.     Second,  the  tax  should  be  used  to  reduce 

or  eliminate  monopoly  profits.     Wherever  the  latter 


294        EEDUCING  THE  COST  OF  LIVING 

object  is  well  served  in  a  highly  organized  society,  the 
former  is  amply  provided  for.  Taxation  should  be 
directed  against  monopoly  profits.  In  so  far  as  that 
is  practicable,  the  products  of  effort  and  industry 
should  go  untaxed.  Always,  however,  the  function  of 
taxation  as  a  means  of  social  regulation  and  equaliza- 
tion should  remain  paramount. 


XXVI 
THE  OUTLOOK 

1.    THE  BURDEN  ON  STATESMANSHIP 

THE  cost  of  living  problem  involves  an  issue  of  great 
magnitude,  reaching,  as  it  does,  to  the  foundation  of 
many  economic  and  social  questions.  Many  steps  lie 
between  the  present  and  a  material  reduction  in  living 
costs. 

Nevertheless,  society  must  find  a  solution  for  the 
increasing  cost  of  living.  The  issue  will  not  adjust 
itself ;  neither  will  it  lie  in  abeyance  until  society  is 
prepared  to  meet  it  and  master  it.  From  millions  of 
households  it  is  now  crying  aloud  for  remedy.  The 
people  demand  relief  from  a  burden  which  is  growing 
yearly  more  intolerable,  and  a  point  has  been  reached 
at  which  these  demands  can  no  longer  be  ignored. 
Statesmanship  and  science  must  unite  their  forces  in 
an  effort  to  raise  this  burden  from  the  backs  of  those 
who  are  so  little  able  to  bear  it. 

When  the  present  Democratic  administration  pro- 
posed to  reduce  the  cost  of  living,  it  assumed  a  grave 
burden  of  responsibility.  Many  people  believed,  and 
many  still  believe,  that  the  administration  will  justify 
the  public  confidence  in  its  ability  to  reduce  living 
costs. 

The  directing  forces  in  the  administration  are  ap- 
parently anxious  to  fulfil  their  pledges.  More  than  a 


296       EEDUCING  THE  COST  OF  LIVING 

year  has  passed  and  prices  are  no  lower  now  than 
they  were  when  the  Democrats  took  office.  Thus 
far,  however,  the  work  of  the  administration  has 
been  headed  in  the  right  direction.  The  tariff  has 
been  reduced  ;  the  banking  of  the  country  has  been 
reformed,  and  the  trusts  more  stringently  curbed. 
The  parcels  post  has  been  extended  ;  the  government 
railroad  in  Alaska  has  become  a  possibility  ;  and  the 
way  has  been  paved  for  the  public  control  of  the  tele- 
graph and  telephone  service.  These  steps  are  begin- 
nings ;  but  they  must  be  followed  by  other  steps,  and 
by  longer  steps,  if  the  administration  is  to  solve  the 
cost  of  living  problem. 

2.  A  LINE-UP  OF  THE  ISSUES 
Some  idea  of  the  distance  which  has  already  been 
covered,  and  of  that  which  must  be  covered  before 
anything  like  a  solution  of  the  issues  at  stake  is  possible, 
may  be  gained  from  a  succinct  summary  of  the  causes 
of  rising  living  costs,  together  with  a  statement  of  the 
specific  ways  in  which  the  cost  of  living  may  be 
reduced. 


THE  HIGH  COST  OF  LIVING 
Causes  Remedies 

1.  The    change   from  rural  to      1.  (a)  Increased  city  efficiency. 

city  life.  (<*)  The  simple  life. 

2.  Rising  standards  of  life.  2.  Education   for  wise  buying 

and  wise  use. 

3.  The  desire  for  accumulation      3.  A  saner  view  of  life. 

of  property. 

4.  The    scarcity    of    the    meat      4.  («)  More  intelligent  farming. 

supply.  (£)  A  decrease  in  the  propor- 

tion of  meat  in  the  diet. 


THE  OUTLOOK  297 

THE  HIGH  COST  OF  LIVING  (Continued) 
Causes  Remedies 

5.  The  exhaustion  of  resources.       5.  (a)  Conservation. 

((>)  Substitution  of  new  re- 
sources. 

6.  The  increasing  gold  supply.        6.  («)  The  use  of  fiat  money,  or 

(£)  An  international  regula- 
tion of  the  £old  supply,  and 

(<•)  Federal  control  over  the 
issue  of  credit. 

7.  The  increasing  cost  of  raw      7.  They  occur  chiefly  in  con- 

materials,  nection  with  the  increase  in 

land  values  (see  8). 

8.  The  increase  in  land  values.       8.  (a)  A  laud  tax  to  absorb  the 

full  economic  value  of  the 
land. 
(b)  Land  nationalization. 

9.  The  increase  in  labor  costs.         9.  Increase  in  the  efficiency  of 

labor. 


ADDITIONAL  MEANS  FOR  REDUCING  THE  COST  OF  LIVING 

1.  The  elimination  of  private  monopoly  in  all  of  its 

forms. 

2.  A  system  of  taxation  that  will  take  all  unearned 

values  for  social  uses. 

3.  An  increase  in  the  service  rendered  to  the  citizen  by 

the  government. 


A  comparison  of  this  list  of  necessary  remedies  with 
the  Democratic  program  will  give  some  idea  of  the 
distance  which  statesmanship  must  travel  before  it  has 
exhausted  the  full  possibilities  of  the  cost  of  living 
problem.  He  who  is  sincere  in  his  desire  to  reduce 
the  cost  of  living  must  be  fully  aware  of  the  fact,  be- 
coming daily  more  patent,  that  the  solution  for  this, 
as  for  many  of  the  other  problems  of  value  and  dis- 
tribution, lies,  not  in  any  superficial  remedy,  but  in  a 
radical  readjustment  of  some  of  the  most  fundamental 


298       KEDUCING  THE  COST  OF  LIVING 

economic  and  social  relations.  No  tabulation  can  give 
an  adequate  idea  of  the  true  nature  of  the  questions  at 
issue  ;  but  if  this  study  has  done  anything,  it  has 
shown  that  they  are  manifold. 

3.    THE  CLEARING  SOCIAL  VISION 

The  clouds  of  doubt  and  of  uncertainty  are  clearing 
away  little  by  little.  Men  and  women  are  learning  to 
see  in  this,  and  in  many  of  the  other  industrial  prob- 
lems which  society  is  facing,  an  issue  that  society 
must  meet  and  master  in  the  very  near  future. 

A  hundred  years  ago  the  Western  World  told  itself 
that  it  might  safely  rely  upon  individual  initiative  for 
the  supplying  of  its  wants.  Individualism  was  unan- 
imously elected.  Has  its  administration  proved  a 
success  ?  Certain  individuals  feel  that  it  has,  but  the 
great  masses  of  mankind  are  questioning  its  results. 
To  be  sure  individualism  is  satisfactory  to  the  success- 
ful individual ;  but  does  it  give  to  men  and  women  in 
the  mass  those  good  things  of  life  which  they  were  led 
to  believe  would  be  forthcoming  if  the  individualistic 
system  of  industry  were  given  a  fair  trial  ? 

Individualism  has  probably  proved  of  great  advan- 
tage as  a  stimulus  to  endeavor  during  the  formative 
period  in  the  development  of  natural  resources.  Do 
the  same  forces  which  promised  so  richly  at  the  dawn 
of  America's  history  still  commend  themselves  to  the 
thoughtful  citizen  ?  He  gazes  upon  an  ordered,  organ- 
ized, socialized  economic  world,  wondering,  meanwhile, 
where  lies  the  justification  for  those  inequalities  and 
those  hardships  which  fall  to  the  lot  of  so  many. 

The  nineteenth  century  was  a  century  of  rapid  de- 


THE  OUTLOOK  299 

velopmeut,  of  deep-seated  transformations.  Society 
organized  and  unified  itself.  Families  moved  together 
into  cities  and  towns.  The  nineteenth  century  was 
the  century  of  American  adolescence.  At  its  close, 
men  looked  back,  proud  of  their  achievement.  They 
looked  forward,  uncertain  which  way  to  go.  The 
things  of  the  nation's  childhood  must  now  be  pat 
away.  What  were  the  childish  things'?  Who  was 
there  wise  enough  and  strong  enough  to  convince  the 
people  that  certain  ideas  and  practices  belonged  to 
early  youth,  and  must  be  left  behind  with  the  passing 
of  youthful  years  ? 

Perhaps  the  most  significant  of  all  of  the  changes 
which  the  nineteenth  century  had  wrought  was  the 
reconstruction  of  popular  ideas  regarding  the  function 
of  government.  The  change  from  village  to  city  life, 
and  from  individualistic  agriculture  to  cooperative 
industry  underlay  the  change  of  thought.  It  was 
upon  this  basis  that  the  new  ideas  were  built. 

4.  THE  FIELD  OF  SOCIAL  SERVICE 
The  eighteenth  century  had  been  taught  to  believe 
that  "government"  and  a despotism "  were  synony- 
mous terms.  "Back  to  nature,"  said  Eousseau. 
"  That  government  governs  best  which  governs  least," 
insisted  Jefferson.  Thus  men  sought  to  escape  from 
the  tyranny  of  authority. 

The  nineteenth  century  has  convinced  Americans 
that  there  are  things  innumerable  which  the  govern- 
ment can  do  far  more  effectively  than  the  individual. 
Indeed,  there  is  a  great  category  of  activities  which 
must  of  necessity  be  government  activities.  The 


300       SEDUCING  THE  COST  OF  LIVING 

policing  and  lighting  of  cities ;  the  organization  and 
direction  of  popular  education  ;  the  planning  of  cities 
and  towns  ;  the  safeguarding  of  health  through  an  in- 
spection of  food  and  drink, — these,  and  innumerable 
other  services  cannot  be  performed  by  the  individual 
city  dweller.  For  them  he  must  rely  upon  the  organ- 
ized government.  The  patency  of  these  facts  has  con- 
vinced men  that  while  government  and  despotism  may 
have  been  synonymous  terms  in  1776,  they  are  not 
necessarily  synonymous  to-day,  since  many  of  the 
services  upon  which  life  now  depends  are  performed 
by  the  government  in  an  entirely  non-despotic  fashion. 

Another  transformation  of  view-point  has  followed 
the  specialization  of  industrial  districts  and  the  inter- 
state commerce  and  commercial  relations  which  inevi- 
tably result  from  such  specialization.  The  people  of 
the  United  States  began  the  nineteenth  century  firmly 
convinced  of  the  efficacy  of  the  State's  Eights  princi- 
ple. They  began  the  twentieth  century  with  a  dawn- 
ing consciousness  of  Federal  unity.  The  State's  Eights 
doctrine  was  rapidly  giving  place  to  the  spirit  of 
nationalism.  Cooperative  industry,  highly  developed 
means  of  communication,  and  the  commercial  inter- 
dependence of  all  parts  of  the  union  made  state  lines 
seem  insignificant  or  useless,  at  the  same  time  that 
they  exalted  broader  ideals. 

The  path  of  national  thought  seems  quite  plain. 
' '  We  desire  good  service  and  fair  prices, ' '  the  people 
insist.  "Will  individualism  yield  them?  If  it  will 
not,  then  perhaps  cooperative  social  service  will  yield 
them." 

Men  have  ceased  to   fear  the  government.     They 


THE  OUTLOOK  301 

look  upon  the  state  as  a  servant  rather  than  a  master. 
Is  the  state  better  able  than  private  initiative  to  sup- 
ply certain  social  needs  ?  If  the  answer  is  affirmative, 
there  is  no  question  but  that  the  state  will  be  given  a 
chance  to  demonstrate  its  efficacy. 

Can  private  industry  furnish  the  goods  and  services 
which  the  world  requires  at  a  reasonable  price  ?  If 
its  profession  and  practice  are  affirmative,  it  will  con- 
tinue unchallenged.  The  developments  of  the  past 
half  century  would  seem  to  lay  the  whole  subject  open 
for  controversy.  Industrial  opportunity  has  narrowed 
to  an  astounding  degree  ;  the  wealth  of  a  few  is  un- 
thinkably  great,  while  the  misery  of  the  lower  strata 
of  society  is  unquestionable  and  unquestioned ;  and 
now,  in  these  latter  years,  prices  rise  steadily,  without 
auy  corresponding  increase  in  many  an  income.  Has 
individualism  proved  a  success  ?  Has  it  served  society 
in  the  best  possible  way  in  which  society  might  be 
served  ?  Would  cooperative  social  activity  be  of  more 
social  service  t  The  real  test  is  the  test  of  service.  Un- 
less the  system  of  individualism  which  the  nineteenth 
century  evolved  can  pass  the  acid  test  of  service,  or 
if  there  is  any  other  means  by  which  more  effective 
service  can  be  rendered,  then,  inevitably,  the  old  sys- 
tem must  give  place.  On  every  side  there  is  a  grow- 
ing belief  that  neither  the  cost  of  living  nor  any  other 
of  the  pressing  economic  problems  can  be  solved  until 
social  activity  is  substituted  for  individual  initiative 
in  the  rendering  of  social  service.  In  so  far  as  the 
cost  of  living  is  concerned,  this  social  service  will  be- 
gin with  an  organized  effort  to  eliminate  monopoly 
profits  of  every  kind,  to  conserve  and  administer 


302        EEDUCING  THE  COST  OF  LIVING 

natural  resources  for  the  benefit  of  society  rather  than 
of  any  individual,  aud  to  raise  the  standard  of  effi- 
ciency both  in  the  production  and  the  distribution  of 
wealth. 


Appendices 


APPENDIX  A 


305 


t 


'  O>  00  "3  lO  1-1  I 


<?*"  a  r- 

W  00  OS  00  »-( 
rH          U5 


"  r-  p  <"  od"  oT  u  «T 

rH        T-»        •*  CC  CD 


i  UO  P3  CO 

i  o  o  <r* 


rH  CO  "*  CO  00  ' 


1 5  et  $  Z  oo  8  !H 


i  CO  (M  •*  O*  CO  i 

1 1>  10  m  os  t-  ' 

t-»  00  00  O5  I"  ; 


!  rH  OS  OS  OS  f»  « 

1 1- 


OS  CC  W  t~  <N  OS  O>  i 

r.  i"  «  t-  o  '-  • 

CO  OS  rH  «O  O  C<5 


TH  rH  «  T}<  CO  t»  I-H 
rH  WJ  CO  I-  •* 


»s 

rH       1 


5gs§ 


On 


a  •- 
-5  •« 


0V9  • 

i3-*»^ 


I^Jl 

sa 


S-<^ 

"J  S   S<^'c'e   S   BJ 

c-gg-uaa^-So; 

&E  S  J  *  *  S  ®  a 
Rr.*3««^.«l 


II 

ejO 


S  S    R,a    fc    MS   O    t^D^   S*2J 


* 


306 


APPENDIX  A 


c 


Oo 

005 
MrH 

P^    _- 


S  ft 

55    u 

«| 

*5  5 

2  ri 


I 


ooS 


aocoiogpo>rHior-cf^j><Nccc< 

•<*•  C<  CO  CO  i-i  -f  00    •«*< 


"»-i  d  OOTJ<  o  ao  M"« 
T-cTj«o5i>.c<iior-(ri5oooT-ic^xco 

UJ         CO  (M        t-l  IO  CO  i-(  CO        00 


O5  CO  rH  O  00  •* 
CO  CJ  C5  O  rH  O 
C*  (N  rH 


'i*  10  c^f  o  t^r-  10  o"rH  CN  o 


os  os  T  oo  »H 


»-i  »o  oi  »o  co'io 

!-ii>r-l!-il-i-<r-<N''r(Nr-i'<}'COC*'<»'<M'-l 
ICN  rt  iMrHOOT-iCO  C« 


rHOOrH^COrHOieOtt-SOOCDCOTjidt^CpiOCO. 
53  "rH         "^  d  rH  """ 


. 


APPENDIX  A 


307 


T-  io~  ?o~  e«f  at  r-  o"  ^-  ac  os"  «  iT  o  c  CD  j 

1-1  00         C<  <N  i-H  t^  TH  t>-  t-  rH  <-(  TJl  ^H  !-« 

i-(        CO  rt        <N  • 


eoaios 

C*        1-1 


—  —  — 


S2^O«o!a3ciroj»&^«^^ 


308 


APPENDIX  B 


8. 


g      GO    r- 

O       «    O 

M      O  O 

^          K       II 

S  §4 

O 

O   ®  8 

&  as 
^  30 

h^        A          /l^ 


i! 

w  > 

o  s 


•**  t-  on 
O  a.S 
4»  JB  S 

6c  o  a 
jTgJ 

1  "j" 

o  2,  a  _ 
G  B  «  » 
*  H«S 

re's  w>!s 
*%  o  .5  .S 


H 


o5   o 

IB  13  a 

ua'43.2 


2P  o  a 

g  a  8 
1 1.4 

•*    Ol  CL 


v  SS 


•**   1 


rH  CM  t^  t»  GO 


rH  O      CO  d  Oi  O  00 


Oi     t*     Oi     Oi     CO 


r^  •*  oi  e«  CD 

rH  ^l  r-i  CO  Oi 
O  O  O  O  Oi 


rH  O  rH  U5  CO 


CO  CD  d  t-  to 


00  CO  ^J  t^  O 

01  Oi  Oi  Oi  O 


OlrHQO  •*  C* 


^    i^ 
fc>  ^ 


O  CD  t-  CD  in 


C»  Oi  TJ<  ^JJ  CO 

f,"  T»<  eo'  oi  o 

Oi    Oi    Oi    Oi    O 


OCOOOrH     OrHCOt^CO 


CO  C*  Oi  CN  CO 

O  O  Oi  O  O 


00 -^  CO  ^f  00 


O  IO  00-<}<C> 


Tfi  OO  <N  "5  U5 


§ 


<N  rH  CO  t-;  CO 

Oi  Oi  Oi  Oi  O 


rH  rH  rH  rH  rH   rH  rH  ' 


APPENDIX  B 


309 


o  LQ  co  r-  c* 


•*»•  oo  os  r-j  o» 

co  o  LO  o  t>i 
r->  c*  CN  co  co 


t-j  o  ct  if        10  os  co 

T»«  eo*  Tf  co"        ec  o  t^ 
**  •*»•  to  co        LO  LO  •«* 


t^  co  r-< 

ci  -«j<  ** 

10  LO  to 


oq  oq  e*    •«*  «  i-j 

»-i  co  to    od  os'  op 
LQ  LQ  LO    to  LO  io 


o  o  »-«  »-i  r-i 


C*  OS  rH  OS  r-J 

c^-^'ooii-J 

O  O  i-H  C  rH 


00  O  00  O»  CO     00  i-   OS  i-  i-   00  t        CO  «O  t< 


«  «O  O     O  l^  t^ 

T-I.-H 

IO  iO 


i-J  t     l     CO  iH 

eo 
o 


CO  O  Oi  IO  r-J 

t-J  uo  o  t-'  r-^ 
<N  c<  co  co  •*)« 


r-_  O  CO  <N_ 

«p  i>  ui  io" 

to  io  co  r- 


t^  CO  OJ 

•*  co  ui 
co  co  co 


«O  «0  CO     OS  O  C« 

i-I  oo'  t»    o>  o  ro 
co  co  co    co  t^  eo 


CO  CO  O  U3  r-t     O  -      CO  00 


W  U5  O 

coco'r-I 

IOUJU5 


O  CN  t^ 

odoioo* 

IQUJiO 


CO  "*  O     CO  rH  ^ 

^i<t--o    CN»-<OD 

kOiOCO     COCOU5 


OOrHrHi-H 


t^OOSOOOO 


rH  r-(U5iH 

od  c<  m  tH        ooous 


OOi-irHrH     T-i< 


co 

U5 


O  O  O  t-;  >O 

co  oo'  •*'  eo'  io 

O  O  i-H  t-i  r-( 


O  r-J  OS  »O  CJ     Cl  O5  J>  C«  CO  O5  t^ 

10"  os  eo  »  -<    »o  -<t  oo'  co        t-^  co  o 

TH  rt  <N  <M  CO     CO  CO  •*  1C 


LO  C  J  O      CO  OS  r-<     CO  IO  00 

to  oo'  oo    tf  oi  o    c*  TJ<  oo 

5  in  »O 


OS^OOOOSCO 

o»  os'  co"  co  oo 

OOrHi-liH 


OO^OlOCO     U3O3OSO 


t-r-«Tj< 

co"  oi  o 

LQtOiO 


OCOrH     CNOOOS     OOt-CO 


J>  CO  O3  T»<  00 


•*  OS  lO  ••*  Tt«     00  OS  O  CO 
CO'»CI-('TI< 


"*  O  CO     00  C*  CO     CO  Tj<  CO 

QTHO     OOCO     lOCo'to 
U5iO»O     U5U5LO     ifllOlO 


TJ<  o   «>  »  co    aq  co  os  co        t-  10  c 


^  «o  i-t    o  os  co    c»  t>  eo 

COOO'oO     -^<K5O5     i-JoOJ 

cococo    cococo    F-t-co 


§OO» 


»H     i-ICOOOrH^<     J--CJ500O  OOOSt* 

§'01-1^00    coc*t-co*i-^    ojcdoso        uieo'ci 
»-n-ii-ii-(    rHCN<MooTf"    T»«Tt<ioi--         iou355 


COCOOS     OOi-<OS     ODiH 

os'i-Ii-J    t»o.-i    oo'c^ 
JoSco    "Scoco    COCDI 


t-COtCOOO     OOCDTj«OffJ     OOdrJ<CJ  OSCO1^ 

co  i-j  oj    2"  LO  to  co  '  ^  -' 

Tf'S'LOCO 


rHOCO     OOlOkO     OSCOCD 

co  od  i^    co'  ui  06    os  os*  t»* 

ICLfJiO     LOIOU5 


OOJ<NCOCO 

eo'odcdcot^    cc'r-icdos'^'    OOSI-"Q 

OOrtrHrH     -HO*(N<NCO     -1<  00  LO  CO 


ooost-    I-HCOOO    aot-t- 
ao'r-io    i-ico'co'    uicd^ 

^  5  U5     LOLOLO     LO  LO  LO 


310 


APPENDIX  B 


B  >  at 

8  -fl  §  a 

g^  a. 2 

rrj    O    M>.? 

a)  „  a  ti 


pin 

^  a  ^  §* 

•RSI  | 

D  **^  35 
*  ^"o  ** 

Ilil 

S 


i  o 


"  '^  IS 

a  §* 


S  b 

c3 


•   55 
•I  1 


a  s  e 
I«* 


25 


Ji'-E 


s^ 


aSCOt-      OS  C<  Ct      CO  rH  rH      C5  00  t- 

t~  10'  co    oo  r^"  os    co  co  o    d  o-i  r-i 


rH  O  00      CN  #*  1>     O  rH  • 


O5  •*  <N     CM  O»  CN 


OS  -^  Cl      O  CO  00      O  <N  CO     r-_  O  t"; 

Sg'S'B  888  885  §Sib' 


O5O'<*1      XrH^     OOOO     OSt-OS 


1C  O5  Tjl       rH 


O  CO  •*     CO  rf  O5 


co  co  o    co  x  >c    rn  t-  e«    i>  10  co 

•^rHrH       rH«(lC       rH^t-^      OOOSOs' 

1C  "C  »O     IO>CIC     CO«OCO     CDCOCp 


rH  l>  Q     00  t~  OS 


OS  O  IO 

00  00  00 


O5COOS     ICtOOO     OrHCO 


co  co  co 


CO  CO  O     rH  CO  C*      CO  O  CO 

i-^  ic  co    o  oo  ei    co'  co'  o    os'  d  os' 

ICIOU3     COiCCO     COCOl-     COt-CO 


CO  <?*  CO   rH  rH  00   CO  U5  »C 

co'  oi  co"  co  «o*  ap  oi  •*  10"  uj  r^  •* 

lOiCiC     iClCtC     CDCOCO     COCOCO 


2  <s  Sja 
s  C  « 

III 


.    CD    S 


October 
Novembe 
December 


35 

"o.e 

f 


APPENDIX  B 


311 


M 

K 

O 


<3  o: 


O     <U 

-         is 

pi 

I 


ncr 
De 


(M  CO  l~  CCn-l  1^  «  00  CO 


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APPENDIX  B 


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Appendix  C 


THE  MOVEMENT  OP  FOOD  PRICES  AND  OF  EARNINGS  IN 
NEW  JERSEY,  1898-1912 l 

OF  the  entire  list  of  fifty  articles,  thirty-eight  show  increases, 
aud  twelve  decreases  of  prices  in  1912,  compared  with  1911.  The 
greatest  increase  is  in  the  price  of  "  old  potatoes,"  which,  in  1911, 
averaged  $0.898  per  bushel,  and  in  1912,  $1.387  per  bushel,  an  ad- 
vance of  $0.489,  or  more  than  54  per  cent.  This  increase  was  offset 
to  some  extent  by  a  reduction  of  $0.263  in  the  price  of  "  new  po- 
tatoes. ' '  Flour  per  25  K>.  bag,  first  aud  second  qualities,  shows  an 
advance  of  $0.068  and  $0.063  respectively.  The  various  cuts  of 
beef  show  increases  ranging  between  two  and  three  cents  per  pound, 
and  pork,  mutton  and  lamb,  show  smaller  increases.  The  average 
prices  of  meats  are  not  as  high  as  they  are  said  to  be  in  offhand 
discussions  of  the  increase  in  the  cost  of  living.  The  prices 
quoted  for  "sirloin  steak"  averages  25.5  cents,  "round  steak," 
22  cents,  and  "rib  roast,"  20.7  cents  per  pound,  and  "bacon" 
shows  an  actual  reduction  of  six-tenths  of  a  cent  per  pound  below 
the  average  for  1911.  The  net  increase  in  average  prices  is,  as 
pointed  out  in  the  review  of  Table  No.  1,  $0.917,  or  6.6  per  cent. 
In  1911,  the  average  yearly  earnings  of  the  approximately  350,000 
operatives,  including  men,  women  and  young  persons  of  both  sexes 
employed  in  manufacturing  industry  throughout  the  state,  skilled 
aud  unskilled,  was  $531.94.  In  1912,  the  average  earnings  were 
$544.30,  an  increase  of  $12.36,  or  2.3  per  cent.  So  far  as  food  sup- 
plies are  concerned,  therefore,  the  earnings  of  factory  and  workshop 
employees  show  a  net  falling  off  in  purchasing  power  of  4.4  per  cent, 
in  1911,  as  compared  with  1910. 

In  1898,  the  list  of  forty-three  articles  showed  a  total  cost  of 
$16.901  ;  in  1912,  the  price  at  which  the  same  goods  may  be  pur- 

1  Thirty-fifth  Annual  Report  of  the  Bureau  of  Statistics  of  Labor  and  Industries 
of  New  Jersey  ;  Sinnickson  Chew  &  Sons  Company,  1913,  pp.  152-154. 

313 


314  APPENDIX  C 


chased  is,  as  shown  by  the  table,  $22.708  ;  the  increase  that  has 
taken  place  during  the  past  fourteen  years  in  the  bill  of  goods  is 
therefore  $5.807,  or  34.36  per  cent.  ;  which  is  an  average  of  2.45  per 
cent,  for  each  of  these  years.  Of  the  forty-three  articles  included 
in  the  comparison  only  five  show  slight  decreases  in  1912  as  com- 
pared with  1898  ;  these  are  :  Oatmeal  in  package,  Java  coffee,  and 
the  three  varieties  of  tea — black,  green  and  mixed.  All  others 
show  increases.  Flour,  first  quality,  shows  an  increase  of  41.15 
per  cent. ;  second  quality,  46.67  per  cent. ;  butter  per  pound,  81.06 
per  cent.  The  highest  percentages  of  increase  are  shown  by  the 
several  varieties  and  cuts  of  meat — beef,  pork  and  mutton.  The 
advance  in  bacon  is  74.38  per  cent. ;  fresh  pork,  67.86  per  cent.  ; 
ham,  53.78  per  cent. ;  beef — corned  brisket,  60.00  percent. ;  corned 
round,  49.17  per  cent. ;  sirloin  steaks  and  round  steaks,  36.36  and 
44.74  per  cent,  respectively,  and  ribs  of  roast  beef,  32.69  per  cent. 

Of  the  thirty-eight  articles  showing  an  increase,  eight  have  ad- 
vances less  than  ten  per  cent.  ;  six  show  increases  of  over  ten,  but 
under  twenty  per  cent.  ;  five  show  increases  ranging  from  twenty 
to  forty  per  cent.  ;  six  show  increases  of  over  forty,  but  under 
sixty  per  cent.  ;  and  thirteen  are  in  the  class  showing  advances 
ranging  upward  from  sixty  to  the  highest — eighty-one  per  cent. 

It  would  be  impossible  to  make  a  reasonably  accurate  estimate 
of  just  what  the  percentage  of  increase  has  been  in  the  outlay  per 
family  for  food  supplies,  from  any  deductions  drawn  from  the  fig- 
ures shown  by  the  table.  The  entire  bill  of  goods  is,  it  is  true, 
34.36  per  cent,  higher  than  it  could  have  been  purchased  for  four- 
teen years  ago,  but  it  should  be  borne  in  mind  that  the  abnormally 
great  increase  in  the  prices  of  a  comparatively  small  number  of 
articles  contained  in  the  bill  is  responsible  for  producing  the  high 
average  increase  shown  by  the  table.  A  definite  knowledge  of 
how  far  the  increase  of  prices  has  affected  incomes  can  be  arrived 
at  only  by  ascertaining  to  what  extent  families  have  turned  to  the 
use  of  the  lower  priced  cuts  of  meat  and  other  varieties  of  foods  as 
substitutes  for  those  showing  the  greatest  increases.  . 

With  regard  to  how  far  wages  or  earnings  have  responded  to  the 
upward  movement  of  prices,  we  find  that  as  shown  by  the  "Sta- 
tistics of  Manufactures  of  New  Jersey,"  the  average  yearly  earnings 
of  all  classes  of  labor,  skilled  and  unskilled,  men,  women  and 
minors,  employed  in  the  factories  and  workshops  of  New  Jersey 


APPENDIX  C  315 


in  1910,  was,  as  stated  above,  $531.94  ;  in  1911,  the  average  for 
these  same  employees  as  shown  by  the  same  authority  is  $544.30 ; 
the  increase  for  the  year  is,  therefore,  nearly  2.3  per  cent.,  while 
the  increase  in  the  bill  of  food  supplies  for  the  same  time  is  6.6 
per  cent.,  which  leaves  the  purchasing  power  of  incomes,  earnings 
and  wages,  in  factory  and  workshop  industries,  just  4.3  per  cent, 
lower  than  it  was  in  1910. 

Since  1898,  a  period  of  fourteen  years,  the  average  annual  eara- 
iugs  of  factory  and  workshop  employees  in  New  Jersey  have  ad- 
vanced 24.5  per  cent.,  which  falls  9.8  per  cent,  short  of  offsetting 
the  increase  in  prices. 


Appendix  D 


V  ABLATION  IN  THE  COST  OP  LIVING  FOE  SIXTY -Six 
NEW  JEBSEY  TOWNS,  1912 


County 

City  or  Town 

Total  Retail  Prices 
of  a  List  of 
Fifty  Articlet  l 

Hunterdon    .... 

Califon   

.    .             $10  915 

Hunterdon     .... 

Glen  Gardner    

....       12  579 

Moutnouth     .... 

Allenwood     

....       12  953 

Hudson  

Jersey  City    

...           12  997 

Morris    

Flanders    

13  035 

Warren  

Phillipsburg  .... 

13  050 

Monmouth     .... 

Marlboro   

...           13  260 

Morris    ,    

Middle  Valley  

....       13  324 

Monmouth    .... 

Freehold    

....       13  535 

Burlington    .... 

Burlington    

....       13  740 

Hudson  ..... 

Hoboken    

....       13.783 

Hudson  

Harrison    

.    .               13  942 

Mercer       

Trenton      

....       13.956 

Cumberland  .... 

Millville    

....       13.985 

Atlantic         .... 

Mays  Landing  ... 

....       14  017 

Monmouth     .... 

Matawan   

....       14.022 

Hunterdon    .... 

Hieh  Bridge  . 

....       14  150 

Bergen    

Garfield         

....       14  172 

Warren  

Marksboro     .       .    . 

....       14  270 

Monmouth     .... 

....       14.289 

Sussex    

Still  water  

....       14.351 

Sussex    

Monroe  

....       14  351 

Gloucester  

....       14  367 

Somerset    

Somerville     

....       14.462 

Morris    

Dover     

....       14.560 

Hunterdon    .... 

New  Germantown   .    .    . 

....       14.561 

Essex  

Newark  

14  570 

Essex  

Newark  

....       14.634 

Monmonth     .... 

....       14.650 

Warren  

Oxford    

14.673 

1  Forty-eight  articles  of  food  ;  soap  ;  and  kerosene  oil. 

316 


APPENDIX  D 


317 


VABIATION  IN  THE  COST  OF  LIVING  FOB  SIXTY-SIX 
NEW  JEBSEY  TOWNS,  1913— Continued 


County 

City  or  Town 

Total  Retail  Pricet 
of  a  List  of 
Fifty  Artidet 

Ocpan                        . 

New  Egypt    . 

....     $14.727 

Ocean          . 

....      14.474 

Middlesex      •    . 

....      14.755 

Wiirren              .   • 

Belvidere  

....      14.798 

Chester  

....       14.810 

Warren      

....       14.830 

Middlesex         . 

....       14.851 

Warren      

Port  Colden  

....       14.854 

Sussex                       . 

....       14.873 

Atlantic 

Ifuniniontou      ..... 

....       14.878 

Hunterdon 

....       14.897 

Union         .    .           . 

....       14.900 

Cumberland 

....       14.900 

Morris 

....       14.974 

Essex 

Belleville 

....       14.980 

Burlington        ... 

Mt.  Holly  

....       15.000 

Warren  ...... 

....       15.019 

Gloucester  

Woodbury     

.    .       15.025 

Essex  

Orange   

.    .       15.171 

Salem     

Salem     

.    .       15  220 

Sussex    

Swartewood  

.    .       15  251 

Cape  May  

Cape  May      

15  270 

Morris    

Boontou      

15  457 

Warren  

Hackettstown   

...       15  475 

Warren  

Washington  

.15  550 

Ocean     

Manahawkiu     

15  625 

Passaio  

Paterson     

.    .       15  668 

Middlesex     .... 

New  Brunswick    .... 

....       15  733 

Burlington    .... 

Bordentown  

....       15  821 

Passaio   

Passaio   ....       . 

15  880 

Middlesex     .... 

Cranbury  

....       15  919 

Camden     

Camden  ...       .   . 

15  998 

Bergen   

Hackensaok  .... 

16  089 

Mercer    

Princeton  

.    .               16  147 

Essex  

South  Orange    

....       16  920 

Rutherford    .    . 

17  356 

An  examination  of  the  table  will  show  that,  generally  speaking, 
prices  are  lowest  in  the  smaller  country  towns  and  highest  in  the 


318  APPENDIX  D 


most  select  residential  communities.  This  can  be  explained  in 
great  part,  if  not  entirely  by  the  difference  in  store  rent,  salaries  of 
clerks,  store  fittings,  delivery,  and  other  expenses  incidental  to  store 
management,  which  are,  as  a  matter  of  course  always  very  much 
greater  in  the  large  cities  and  towns.  In  these  places  dealers  handle 
groceries  alone,  while  in  the  country  store  all  kinds  of  goods  are 
usually  sold  in  addition  to  food  supplies,  and  there  is  therefore 
a  much  wider  range  of  merchandise  from  which  the  profits  of  the 
business  may  be  drawn.1 

•  Thirty-fifth  Annual  Report  of  the  Bureau  of  Statistics  of  Labor  and  Industries 
of  New  Jersey,  Camden  :  Sinnickson  Chew  &  Sons  Company,  1913,  p.  151. 


APPENDIX  E 


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Appendix  G 


THE  INCKEASE  IN  THE  TOTAL  POPULATION  OF  THE  UNITED 

STATES,  BY  DECADES,  1790-1910  l 


Census  Year 

Population  of  the  United 
States  Exclusive  of 
Outlying  Possessions 

Increase  over 
Preceding  Census 
Per  Cent. 

1790 

3,929,214 

1800 

5,308,483 

'  35.1 

1810 

7,239,881 

36,4 

1820 

9,638,453 

33.1 

1830 

12,866,020 

33.5 

1840 

17,069,453 

32.7 

1850 

23,191,876 

35.9 

1860 

31,443,321 

35.6 

1870 

38,558,371 

22.6 

1880 

50,155,783 

30.1 

1890 

62,947,714 

25.5 

1900 

75,994,575 

20.7 

1910 

91,972,266 

21.0 

Thirteenth  Census  of  the  United  States,  Vol.  I,  Washington,  Government 
Printing  Office,  1910,  p.  24. 


Appendix  H 


A  COMPARISON  BETWEEN  THE  STOCK  OF  GOLD  ;  THE 

NOTES  IN  CIRCULATION,  AND  LOANS  AND 

DISCOUNTS,  1889  TO  1910  » 

(a)   GOLD  STOCK 


Banks  and 
Treasuries 

December  Jft 
1889 

December  Jf, 
'899 

December  JJ, 
igio 

Europe    .    .    . 
U.  S.  A.  .    .    . 
Australasia    . 
Canada       .    . 
South  Africa  . 
Japan  .... 

$914,396,264 
423,906,282 
89,853,167 
7,322,710 
5,000,000 

$1.601,253,370 
683,889,570 
106,432,311 
22,630,659 
32,800,000 
51,571,000 

$2,464,452,800 
1,410,721,622 
184,500,000 
108,200,000 
50,400,000 
111,196,000 

Grand  Total 

$1,440,478,423 

$2,498,576,910 

$4,329,470,42:} 

(6)    NOTES  IN  CIRCULATION 


Banks  and 
Treasuries 

December  Jf, 
1889 

December  Jf, 

'$99 

December  Jf, 
1910 

Europe  .  .  . 
U.  S.  A.  .  .  . 
Australasia  . 
Canada  .  .  . 
South  Africa  . 
Japan  .... 

$2,818,198,481 
126,521,364 
29,078,000 
32,207,144 
5,036,093 
78,871,326 

$2,973,194,348 
199,411,492 
21,995,908 
41,513,139 
9,091,762 
124,779,896 

$4,324,716,358 
684,163,511 
107,240,549 
82,120,303 
8,773,000 
200,009,214 

Grand  Total 

$3,089,914,408 

$3,369,956,545 

$5,407,022,935 

(c)    LOANS  AND  DISCOUNTS 


Banks  and 
Treasuries 

December  Jf, 
1889 

December  J/t 
*99 

December  j/, 
jgio 

Europe  .  .  . 
U.  S.  A.  .  .  . 
Australasia  . 
Canada  .  .  . 
South  Africa  . 
Japan  ... 

$3,031,196,402 
3,842,272,131 
623,589,889 
149,958,980 
25,620,935 
109,874,197 

$4,184,131,405 
5,167,895,610 
492,110,885 
251,467,076 
107,044,970 
501,357,073 

$5,146,396,802 
12,855,303,194 
626,862,333 
870,100,890 
179,028,958 
915,641,306 

Grand  Total 

$7,782,512,534 

$10,704,007,019 

$20,593,333,483 

'  Gold,  Prices  and  Wages,"  by  J.  A.  Hobson, — G.  H.  Doran  Company,  pp.  S<>-5'. 
327 


Appendix  I 


THE  ANNUAL  OUTPUT  OF  GOLD  AND  THE  PEICE  INDEX  NUMBEB, 
1850  TO  1912 l 


Year 

World's  Annual  Output 
of  Gold 

Wholesale  Prices 
(Index  Numbers) 

1850 

$  44,500,000 

89.2 

1851 

67,600,000 

98.6 

1852 

132,800,000 

97.9 

1853 

155,500,000 

105.0 

1854 

127,500,000 

105.0 

1855 

135,100,000 

109.2 

1856 

134,000,000 

112.3 

1857 

134,000,000 

114.0 

1858 

133,000,000 

113.2 

1859 

130,000,000 

102.9 

1860 

127,000,000 

100.0 

1861 

122,000,000 

94.1 

1862 

119,000,000 

101.6 

1863 

119,000,000 

91.1 

1864 

122,000,000 

110.7 

1865 

126,000,000 

107.4 

1866 

127,000,000 

134.0 

1867 

127,000,000 

132.2 

1868 

126,000,000 

125.6 

1869 

125,000,000 

112.3 

1870 

123,000,000 

119.0 

1871 

119,000,000 

122.9 

1872 

113,000,000 

121.4 

1873 

112,000,000 

114.5 

1874 

90,750,000 

116.6 

1875 

97,500,000 

114.6 

1876 

103,700,000 

108.7 

1877 

113,947,200 

107.0 

1878 

119,092,800 

103.2 

1879 

108,778,800 

95.0 

1880 

106,436,800 

104.9 

1881 

103,023,100 

108.4 

328 

APPENDIX  I 


329 


THE  ANNUAL  OUTPUT  OF  GOLD  AND  THE  PRICE  INDEX  NUMBER, 
1&50  TO  1912—  Continued 


Year 

World's  Annual  Output 
of  Gold 

Wholesale  Prices 
(Index  Numbers) 

1882 

$101,996,600 

109.1 

1883 

95,392,000 

106.6 

1884 

101,729,600 

102.6 

1885 

108,435,600 

93.3 

1886 

106,163,900 

93.4 

1887 

105,774,900 

94.5 

1888 

110,196,900 

96.2 

1889 

123,489,200 

98.5 

1890 

118,848,700 

112.9 

1891 

130,650,000 

111.7 

1892 

146,651,500 

106.1 

1893 

157,494,800 

105.6 

1894 

181,175,600 

96.1 

1895 

198,763,600 

93.6 

1896 

202,251,600 

90.4 

1897 

236,073,700 

89.7 

1898 

286,879,700 

93.4 

1899 

306,724,100 

101.7 

1900 

254,576,300 

110.5 

1901 

260,992,900 

108.5 

1902 

296,737,600 

112.9 

1903 

327,702,200 

113.6 

1904 

347,377,200 

113.0 

1905 

380,288,700 

115.9 

1906 

402,503,000 

122.5 

1907 

412,966,600 

129.5 

1908 

442,476,900 

122.8 

1909 

454,059,100 

126.5 

1910 

455,259,800 

131.6 

1911 

461,542,100 

129.2 

1  Figures  1850  to  1889  from  "The  Gold  Supply  and  Prosperity,"  B.  W.  Holt, 
New  York,  The  Moody  Corporation,  1907.  pp.  76-79.  Gold  figures  1800  to  1912 
from  "Statistical  Abstract  of  the  United  States,  for  1012,"  p.  797.  Wholesale 
Prices,  1890  to  1912,  Bulletin  114,  United  States  Bureau  of  Labor  Statistics,  Wash- 
ington, Government  Printing  Office,  1913,  p.  9. 


330 


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Appendix  L 


AVERAGE  WAGE  RATES  PER  MONTH  FOR  OUTDOOR  FARM 

LABOR,  HIRED  BY  THE  YEAR,  WITHOUT  BOARD, 

1866  TO  1909' 


Year 

United 
States 

North 
A  tlantic 

South 
Atlantic 

North 
Central 

South 
Central 

West- 
ern 

1866   ... 

$15.50 

$22.04 

$10.67 

$20.39 

$12.57 

$40.28 

1869   .... 

15.50 

22.36 

10.72 

20.01 

13.18 

46.38 

1874  or  1875 

17.10 

24.09 

12.73 

21.11 

14.55 

40.69 

1877  or  1878 

1878  or  1879 

(combined) 

16.79 

20.42 

11.49 

20.73 

14.88 

33.68 

1879  or  1880 

17.53 

21.23 

12.25 

21.88 

15.16 

34.77 

1880  or  1881 

18.52 

22.52 

12.87 

22.81 

16.31 

36.01 

1881  or  1882 

19.11 

24.21 

13.70 

24.08 

16.52 

36.67 

1884  or  1885 

19.22 

23.88 

13.79 

23.51 

15.65 

37.19 

1887  or  1888 

19.67 

24.15 

13.88 

23.67 

15.84 

35.64 

1889  or  1890 

19.45 

24.72 

13.94 

22.25 

16.10 

33.96 

1909   .... 

25.46 

30.89 

18.76 

30.55 

20.27 

44.35 

1  United  States  Department  of  Agriculture,  Bureau  of  Statistics,— Bulletin  99, 
Washington,  Government  Printing  Office,  1912,  p.  29. 


334 


Index 


AGRICULTURAL  labor,  wages  of, 

194.  195 

American  city  population,  change 
in  1790-1910,  45 

American  life,  changing  form  of, 
41-51  ;  movement  from  vil- 
lages into  cities,  43 

American  living  standard,  grow- 
ing higher,  41  ;  increase  in 
wants,  35,  36 

Anthracite  coal  industry,  wages 
in,  197,  198 

Average  prices,  1890-1913,  Ap- 
pendix B;  retail,  1898-1913, 
Appendix  B 

"  BACK  to  nature,"  possibilities 
of,  210 

Banking,  necessity  for  centralized 
form  of,  28 

Boston,  increase  in  land  value, 
1 86,  187,  191  ;  land  valuation, 
1887-1911,  189;  price  in- 
creases, 1890-1910,  no 

Brooklyn,  per  capita  increase  in 
land  value,  1 88 

Building  trades,  wage  increase 
in,  199 

Buying,  education  for,  229 ;  rules 
for,  232 

CEREAL  crops,  production  of,  129 
Cereals,  per  capita  acre  yield  in 

United  States,  132 
Changes  in  American  family  life, 

48-50 
_  Children,  services  of,  224 


Cities,  effect  of  development  of, 
on  services,  57 

City  dweller  and  the  land,  218 

City  land,  taxation  of,  291 

City  land  values,  effect  of  New 
York  Subway  on,  185 ;  in- 
crease in.  Appendix  K 

City  man  and  the  land,  222 

City  markets  and  efficiency  of 
food  distribution,  245 

City  woman  and  the  land,  222, 
223 

Civilization,  effect  of  on  goods 
and  services,  53 ;  pressure  of 
on  living  standards,  82 ;  and 
increasing  prices,  206 

Cloths  and  clothing,  price  in- 
creases, 171 

Coal,  production  of,  146 

Coal  Trust,  and  the  price  of  coal, 
162 

Cold  storage,  part  in  price  regu- 
lation, 244-245 

Combination  and  profits,  279,  280 

Comforts,  definition  of,  67 

Compensated  dollar  as  a  medium 
of exchange,  269,  270,  271 

Competition,  effects  of,  278  ;  and 
progress,  2 10;  and  small  prof- 
its, 279 ;  undesirability  of,  210 

Conservation,  definition  of,  248 ; 
effect  of  on  cost  of  living,  248- 
258  ;  essential  element  in  price 
control,  248 ;  and  the  State, 
256,  257,  258 

Consumer,  power  of,  232,  233 ; 
see  Buying 


336 


INDEX 


Cooperation,  advantages  of,  53 ; 
consumers',  abroad,  236;  con- 
sumers', United  States,  237, 238; 
and  social  service  in  reduction 
of  living  costs,  301  ;  transition 
from  competition  to,  279,  280 

Cost  of  government,  88,  89 ;  in 
France,  89,  90 ;  in  Massa- 
chusetts, 89,  90;  in  United 
Kingdom,  89,  90 

Cost  of  living,  appeal  of  the  home, 
32 ;  attitude  of  Democratic 
party  toward,  25-27  ;  attitude 
of  political  parties  toward,  23, 
24 ;  attitude  of  Republican 
party  toward,  31 ;  burden  of 
statesmanship  in  reduction  of, 
295  ;  standard  decided  by  civi- 
lization, 35 ;  effect  of  Demo- 
cratic policy  on,  29 ;  effect  of 
producers'  co5peration,  246 ; 
factors  increasing  the,  201, 
202;  forces  modifying,  117; 
increase  in  prices,  1890-1913, 
Appendix  B;  increase  in  wages, 
200 ;  magnitude  of  problem, 
297,  298 ;  movement  to  the 
land,  220,  221  ;  New  Jersey, 
1898-1913,  Appendix  B  ;  out- 
look for  reduction  of,  295-302 ; 
political  issue,  23-30 ;  problem 
of,  originates  in  the  home,  33  ; 
responsibility  for  high,  122, 
1 23  ;  social  problem,  3 1-40 ; 
variation  in  for  New  Jersey 
towns,  Appendix  D 

Costs  of  production,  120 ;  of 
paper,  Appendix  F 

Cotton,  production  of,  146 

Credit,  international  adjustment 
of,  275  ;  medium  of  exchange, 
273,  274 ;  monopoly  of,  285  ; 
socialization  of,  274,  275 

Credit  money,  effect  of  on  prices, 
147;  use  of,  139 

Currency  law,  effects  of  on  prices, 


28  ;  passage  of  by  Democratic 
party,  28 

DAIRY  products,  supply  of,  128 

Democratic  administration,  steps 
toward  reduction  of  cost  of  liv 
ing,  296 

Democratic  party,  activities  oi 
toward  price  reduction,  27, 28  ; 
attitude  of  toward  cost  of  living 
problem,  24—27  ;  effect  of  high 
prices  upon,  26,  27  ;  regulation 
of  trusts,  29  ;  responsibility  of 
for  reducing  living  costs,  295 

Domestic  science,  education  for, 
230;  home  schools  for  the 
teaching  of,  236;  home  train- 
ing in,  235 ;  importance  of, 
233 ;  place  of,  in  school,  23 1 

Drug  Trust,  and  the  price  of 
drugs,  1890-1912,  161 

EARNINGS,  and  food  prices,  New 
Jersey,  Appendix  C 

Eastern  States,  increase  in  farm 
land  value  per  acre,  181 

Economic  forces,  and  price 
changes,  117 

Education,  effect  on  efficiency  of 
food  distribution,  247 ;  effect 
on  standard  of  necessaries,  82 ; 
for  buying,  229,  230;  for  do- 
mestic science,  230 ;  social  (see 
Social  Education) 

Effort,  goods  the  end  of,  97 

Exchange  medium,  compensated 
dollar,  269-271  ;  fiat  money, 
271,272;  increasing  efficiency 
of,  267-276  ;  increasing  stabil- 
ity of,  by  international  agree- 
ment, 276;  stabilizing  the,  267, 
268 

Expenditures,  for  various  kinds 
of  food,  III;  per  cent,  for  cer- 
tain kinds  of  food,  Appendix  E 


INDEX 


337 


Extravagance,  in  modern  life,  79, 
80 

FAMILY,  a  buyer,  not  a  producer, 
50,  5 1  ;  characteristics,  changes 
in,  47-50  ;  economic  solidarity 
of  in  nineteenth  century,  49 ; 
industrial  in  the  twentieth  cen- 
tury, 49  ;  necessities  and  lux- 
uries of,  38 

Family  life,  basis  of  cost  of  living 
problem,  46 

Farmer  and  the  land,  225 

Farm  labor,  wages  of,  194,  195, 
Appendix  L 

Farm  land,  increase  in  value  of, 
1900-1910,  179,  180;  tax- 
ation of,  292  ;  total  value,  Ap- 
pendix J 

Farm  land  increases,  East  and 
West,  181  ;  of  geographical 
divisions  in  United  States,  180 

Farm  land  values,  increase  in, 
Appendix  J 

Farm  products,  price  increases, 
1890-1912,  170 

Fiat  money,  as  a  medium  of  ex- 
change, 271,  272 

Fillebrown,  C.  B.,  quoted,  186, 
187 

Fisher,  I.,  quoted,  114,  140,  141, 
143,  149,  151 

Floods  and  conservation  of  tim- 
ber land,  252,  253 

Folks,  Homer,  quoted,  185 

Food  distribution,  and  commission 
merchants,  244 ;  and  the  job- 
ber, 244 ;  and  specialization, 

241,  242 ;   direct  relation   be- 
tween producer  and  consumer, 

242,  243 

Food  expenditures,  per  cent,  for 
certain  foods,  Appendix  E ; 
proportion  of  and  price  changes, 

III-II2 

Food,  increasing  efficiency  of  dis- 


tribution,     240-247;    kinds 
bought,  in;   rise  in  price  of, 

23 

Food  prices,  1890-1913,  Appen- 
dix B ;  and  earnings,  New 
Jersey,  1898-1912,  Appendix 
C  ;  effect  of  farm  land  increases 
on,  184 ;  variations  in  Wash- 
ington, 112,  113 

Food  supply,  adequacy  of,  131, 
132,  135  ;  and  population  in- 
crease, 124,  131,  132;  limita- 
tions on,  125 ;  and  the  meat 
famine,  129,  130 

France,  cost  of  government  in,  89, 
90 

Franchises  and  monopoly  profits, 
282,  283 

Fuel  and  light,  price  changes  in. 
114 

GENERAL  prices,  fallacy  of,  151 
Glass   Trust   and   price  of  glass 

products,  1890-1912,  161 
Gold,  annual  output  of,  146  ;  an- 
nual output  of  and  the  price 
index,  Appendix  I ;  as  a  stand- 
ard of  value,  137,  138 ;  as  the 
medium  of  exchange,  267  ;  ef- 
fect of  on  prices,  141  ;  increase 
in  supply  of,  144 ;  stock  of, 
Appendix  H ;  total  supply  of, 

153 

Gold  production,  1850-1912,  Ap- 
pendix I ;  increase  in,  144,  145 

Gold  supply,  effect  on  prices,  154 ; 
government  regulation  of,  268, 
269;  increase  in,  136;  offsets 
to,  145  ;  of  the  world,  146 

Goods  philosophy  of  life,  97 

Government,  change  in  attitude 
toward,  299,  300,  301  ;  cost  of, 
88,  89  ;  part  of  in  regulation  of 
monopoly  power,  287,  288 ; 
part  of  in  regulating  service 
and  prices,  299,  300 


338 


INDEX 


Growth  of  cities,  effect  of  growth 
of  industry  on,  45 

HEALTH  and  labor  efficiency,  262 
High  cost  of  living,  attempts  to 
personalize    blame    for,    204 ; 
complexity   of,    116;  responsi- 
bility of  producer  for,  204 
Hobson,  J.  A.,  quoted,  147 
Holt,  B.  W.,  quoted,  138,  139, 

140, 153 

Home,  and  the  teaching  of  do- 
mestic science,  235  ;  changes 
in,  234,  238 ;  functions  of,  234 

Home  schools  and  domestic  sci- 
ence, 236 

IMPORT  duties,  reduction  of,  27 

Income  and  wants,  relation  of, 
212 

Income,  burden  of  services  upon, 
64 ;  effect  of  industrial  revolu- 
tion on,  240,  241 

Income  tax,  effectiveness  of,  292, 

293 

Increase  in  cost  of  production, 
complexity  of  factors,  165,  166; 
and  cost  of  product,  165  ;  ef- 
fect of  transportation  rates  on, 
1 66;  interest,  166 

Increase  in  land  values,  Boston, 
1 86,  187  ;  city,  East  and  West, 
190,  191 ;  effect  on  cost  of  liv- 
ing, 1 66 

Increase  in  Massachusetts  yearly 
earnings,  198 

Increase  in  total  population,  1790- 
1910,  Appendix  G 

Increase  in  wages,  and  the  cost 
of  living,  200 

Increase  of  wants,  effect  of  on 
happiness,  36 

Increased  cost  of  living,  causes 
of  and  remedies  for,  296,  297 

Increased  efficiency  of  labor,  defi- 
nition of,  259 


Increasing  cost  of  living,  mean- 
ing of,  36,  37  ;  wants,  increase 

in.  37 

Increasing  gold  supply,  136 
Increasing  prices,  causes  of,  116 
Individualism,  its  part  in  indus- 

try, 298,  301 
Industrial  combination,  and  the 

cost  of  living,  155 
Industrial   monopoly,   control   of 

profits,  286  ;    effect  on   prices, 

285,  286 
Industrial   revolution,  overthrow 

of    handcraft    industries,    43  ; 

secondary  sources  of  income, 

240,  241 
Industry,  changing  form  of,  44  ; 

effect  of  inventions  on,  43 
Inheritance  tax,  use  of,  292,  293 

JENKS,  J.  W.,  quoted,  156,  157 

LABOR  costs,  increase  in,  193-200 

Labor  efficiency  and  health,  261  ; 

and  premature  death,  262,  263  ; 

and     scientific     management, 

264,   265  ;   and    specialization, 

263,  264  ;  and  wages,  265  ;  ef- 

fect of  education  and  skill  on, 

260,  261;  possibility  of,  259 

Labor,  increase  in  cost  of,  1866- 


Land,  and  the  city  dweller,  218; 
place  of  in  production,  176  ; 
movement  to  the,  217,  218, 
219;  taxation  of,  290,  291; 
ownership  and  monopoly 
power,  281,  282 

Land  products,  effect  of  conser- 
vation on  prices  of,  242,  249 

Land  values,  increase  in  city, 
Appendix  K  ;  increase  in  Bos- 
ton, Appendix  K  ;  increase  in 
Brooklyn,  Appendix  K  ;  in- 
crease in  Dallas,  Appendix  K  ; 
increase  in  Houston,  Appen- 


INDEX 


339 


dix   K ;   increase    in    Newark, 
Appendix  K  ;  increase  in  New 
York  City,  Appendix   K  ;   in- 
crease in  Trenton,  Appendix  K 
Layton,  W.  T.,  quoted,  148 
Living,   American    standard    of, 
33 ;  each  social  group  its  own 
meaning  of,  34 ;   meaning  of, 
33-35  J  purpose  of,  37 
Living  standards,  diversity  of,  34 
Loans  and  discounts,  Appendix  H 
Lumber  and  building  materials, 

price  increases,  172 
Luxuries    and    necessaries,    dis- 
tinction between,  68 
Luxuries,  and  the  neighbors,  92 ; 
and    the    well-to-do,    69 ;    ap- 
prisal  of,  69  ;  definition  of,  67  ; 
growth  of,  a  menace,  71 ;  pro- 
duction    of,    69,    70 ;     profits 
from,  6 1 ;  reasons  for,  68,  71, 
72 ;    rising    standard    of,   69 ; 
statistics    of    production,    Ap- 
pendix A ;  use  of  as  a  bar  to 
necessaries,  70 
Luxury,  social  burden  of,  77 

MACHINERY,  development  of  and 
productive  labor,  63 ;  monop- 
oly of,  286,  287 

Mail  order  house,  part  of  in  re- 
ducing cost  of  living,  246,  247 

Making  a  living,  changes  in 
methods,  42 

Making  work,  fallacy  of,  76 

Malthus,  T.,  quoted,  131,  132; 
predictions  of,  132 ;  ultimate 
philosophy,  133 

Manufacturing  industries,  in- 
crease in  wages,  199 

Massachusetts  Commission  on 
Cost  of  Living,  quoted,  164,  200 

Massachusetts,  cost  of  govern- 
ment in,  89,  90;  increase  in 
yearly  earnings,  198 ;  statis- 
tics of  yearly  earnings,  198 


McMaster,  J.  B.,  quoted,  86,  87 
Meat  animals,  decrease  in  num- 
ber of,  127,  130 
Meat  famine,  menace  of,  129 
Meat  supply,  and  the  increase  in 

population,  125,  126 
Metals    and    implements,    price 

changes  in,  173 
Middleman,  effect  of  on  cost  of 

living,  246,  247 
Mileage  of  railroads,  146 
Mineral  land,  taxation  of,  292 
Mineral    resources,   conservation 

of,  250 
Money  and  credit,  international 

adjustment  of,  275 
Money  and  prices,  138 
Money,  total  in  circulation,  1912, 

»39 

Monopoly,  of  machinery  of  pro- 
duction in  United  States,  287  ; 
and  the  price  of  boots  and 
shoes,  162 ;  and  rising  prices, 
119;  prevalence  of  in  United 
States,  278 

Monopoly  prices,  how  fixed,  25 1 
Monopoly  profits  and  the  fran- 
chise, 282,  283 ;  and  land  own- 
ership, 281,  282;  and  the 
patent,  284  ;  definition  of,  277  ; 
elimination  of,  277-288 

NATURAL  resources,  classes  of, 
249 

Necessaries  and  luxuries,  distinc- 
tion between,  68 

Necessaries  and  social  standards, 
84 

Necessaries,  ascending  standard 
of,  79 ;  definition  of,  67,  79 ; 
effect  of  education  on,  82 ;  ef- 
fect of  unequal  income  on,  84  ; 
in  the  eighteenth  century,  85- 
87;  production  of,  80;  rising 
standards,  90 ;  statistics  of  pro- 
duction, Appendix  A 


340 


INDEX 


Neighbors,  and  a  "  goods  "  stand- 
ard of  judgment,  94,  96 ;  and 
competition,  93 

Newark,  increase  in  land  value, 
191 

New  Jersey  Bureau  of  Statistics, 
quoted,  113 

New  Jersey,  cost  of  living,  1898- 
1913,  Appendix  B;  price  in- 
creases since  1898,  109;  varia- 
tions in  cost  of  living  for  sixty- 
six  towns,  Appendix  D  ;  prices, 
percentage  of  increase,  1898- 
1911,  no 

New  York  City,  assessment  of 
land  and  improvements,  187, 
1 88;  Bronx  total  land  value 
increase,  1 88;  increase  in  land 
values,  Appendix  K ;  effect  of 
subway  on,  185  ;  Manhattan 
per  capita  increase  in  land 
value,  1 88 ;  Richmond  increase 
in  land  values,  188;  total  in- 
crease in  land  value,  188,  189 

NINETEENTH  CENTURY,  develop- 
ment in,  298,  299  ;  function  of 
government,  299 

Nitrogen   starvation,  menace   of, 

'33.  134 

North  Central  States,  farm  land 
increases,  1900-1910,  183;  in- 
crease in  population  and  acre- 
age, 182 

Notes  in  circulation,  Appendix  H 
Nutrition  and  the  nitrogen  sup- 

piy.  '33. 134 

PAPER,  cost  of  production  of,  Ap- 
pendix F 
Paper  Trust  and  price  of  paper 

products,  161 

Patents  and  monopoly  profits,  284 
Philanthropy  as  a  luxury,  72,  73 
Pig-iron,  production  of,  146 


Platinum,  as  a  medium  of  ex- 
change, 268 

Population,  increase  of  and  the 
food  supply,  124;  increase  of 
and  the  meat  supply,  125,  126; 
increase  in  total,  1790-1910, 
Appendix  G 

Price  change  figures,  method  of 
collection  in  New  Jersey,  108 

Price  changes  and  economic 
forces,  117;  and  proportion  of 
food  expenditure,  1 1 2  ;  fuel 
and  light,  1 14  ;  future  of,  1 14, 
115;  in  necessaries,  and  the 
$900  family,  103,  104 ;  in 
necessaries  of  life,  103-115; 
Massachusetts  data,  107  ;  New 
Jersey  data,  107,  108 ;  reasons 
for,  105,  1 06 ;  universal  inter- 
est in,  105  ;  variation  in,  1 10  ; 
Washington  data,  107  ;  whole- 
sale, 113,  114 

Price  data,  difficulty  in  obtaining, 
106,  107 

Price  increase,  causes  of,  1 16 ; 
raw  materials,  effect  on  cost  of 
living,  167  ;  New  Jersey,  1898- 
1913,  Appendix  B ;  ratio  of, 
1890-1913,  Appendix  B;  vital 
to  workingman,  104,  105 

Price  increases,  a  conquerable 
obstacle,  206;  and  the  trusts, 
155,  156;  cloths  and  clothing, 
171  ;  farm  products,  1890- 
1912,  170;  inconvenient  to 
well-to-do,  103,  104;  lumber 
and  building  materials,  172 ; 
meaning  to  well-to-do,  39 ; 
meaning  to  workingmen's  fam- 
ilies, 39  ;  methods  of  checking, 
205 

Price  index,  how  obtained  by 
United  States  Bureau  of  Labor, 
169;  and  annual  output  of 
gold,  Appendix  I 

Price   movements,   of   the  nine- 


INDEX 


341 


teenth  century,   149,  150,  152, 

'53 

Price  of  boots  and  shoes,  and  the 
trust,  162 ;  coal,  and  the  Coal 
Trust,  162 ;  drugs,  and  the 
Drug  Trust,  161  ;  glass  prod- 
ucts and  the  Glass  Trust,  161 ; 
lumber,  effect  of  rise  in  timber 
land  values  on,  178;  oil,  and 
the  Standard  Oil  Co.,  158, 159 ; 
paper  products  and  the  Paper 
Trust,  161 ;  proof  spirits  and 
the  trust,  162 ;  steel,  and  the 
Steel  Trust,  160 ;  sugar,  and 
the  Sugar  Trust,  159 ;  tobacco, 
and  the  Tobacco  Trust,  160 

Price  reduction,  a  slow  process, 
207 

Prices,  1890-1913,  Appendix  B  ; 
1898-1913,  Appendix  B;  ad- 
justment of  wage  scale  to,  23  ; 
and  money,  138  ;  effect  of  cold 
storage  on,  245  ;  effect  of  con- 
servation of  timber  land  on, 
252 ;  effect  of  currency  law  on, 
28 ;  effect  of  increase  in  raw 
material  on,  163 ;  effect  of  in- 
creased labor  costs  on,  193, 
194 ;  effect  of  market  price 
bulletin  on,  245,  246 ;  effect  of 
producers'  cooperation,  246 ; 
effect  of  substitution  of  natural 
resources  on,  250,  25 1  ;  effect 
of  upon  Democratic  party,  26, 
27 ;  principles  for  the  reduction 
of,  206 ;  rapid  increase  in,  25  ; 
regulation  of  terminals  and 
markets,  245  ;  rise  in,  and  in- 
come, 32 ;  tariff,  and  excessive, 
26 

Production,  a  prerequisite  to  con- 
sumption, 78 ;  costs  of,  Ap- 
pendix F ;  costs  of  and  rising 
prices,  I2O,  121  ;  dairy  prod- 
ucts, 1 28  ;  redirection  of,  70  ; 
three  important  factors  in,  166 


Production  of  luxuries,  69,  70 
Production  of  necessaries,  80-82 
Production    of    necessaries    and 

luxuries,  Appendix  A 
Productive  labor,  decrease  of,  62 
Progressive     party,     attitude     of 

toward  cost  of  living,  24 
Property  ownership,  as  a  source 

of  income,  77 

Prosperity  and  spending,  73 
Public  services,  an   essential   to 

modern  life,  61 

Purchaser  (see  Buying  and  Con- 
sumer) 

Purchasing  power  and  the  in- 
creasing gold  supply,  139 

RAILROAD  wages,  increase  of, 
196 

Railroads,  mileage  of,  146 

Raw  materials,  increase  in  cost 
of,  165-175 

Reduction  of  cost  of  living,  and 
Democratic  success,  29 

Reducing  the  cost  of  living  fac- 
tors, 20 1 

Regulation  of  terminals  and  mar- 
kets, effect  of  on  prices,  245 

Remuneration  and  labor  ef- 
ficiency, 265 

Rent,  regulation  of,  291,  292 

Republican  party,  attitude  of 
toward  cost  of  living  problem, 

23,  24 
Resource  monopoly,  effect  of  on 

prices,  250,  251 
Rise  in  American  city  land  values 

universal,  187 
Rise  in  prices  and  exhaustion  of 

timber  supply,  179 
Rise  in  timber  land  value,  effect 

on  price  of  lumber,  178 
Rising  prices  and  production,  1 20, 

121 
Rising  prices,  artificially  induced, 

119;  causes  of,  117,  118;  fac- 


342 


INDEX 


tors   in,    202,   203 ;  forces   be- 
hind,   117;    responsibility    of, 
122,    123;   statistics   of   1890- 
1913,  Appendix  B 
Rousseau,  philosophy  of,  210 
Rural  life,  change  in,  47  ;  mini- 

mum  of  service  in,  56 
Ruskin,  John,  quoted,  71 

SCIENTIFIC  management  and  la- 
bor efficiency,  264,  265 

Self-service,  advantages  of,  227  ; 
impossibility  in  modern  so- 
ciety, 53 

Senate  Committee  on  Wages  and 
Prices,  quoted,  199 

Servant  problem,  among  the  well- 
to-do,  58  ;  an  element  in  living 
standards,  54 ;  and  factory 
work,  59 ;  and  servility,  57 ; 
effect  of  city  life  upon,  57 

Servants,  abolition  of,  59 ;  and 
servility,  224,  225 ;  burden  of, 
59;  dominance  of,  59;  effect 
upon  happiness,  63 

Services,  an  element  in  civiliza- 
tion, 52;  and  group  life,  64; 
as  a  burden  upon  income,  64 ; 
as  comforts  and  luxuries,  65 ; 
effects  of  the  servant  problem, 
58;  increasing  demand  for,  52; 
increase  in  service  occupations, 
61 ;  limitations  of  custom,  54 ; 
minimum  in  rural  life,  56 ;  pub- 
lic, 60;  relied  on  by  the  well- 
to-do,  55 

Servility  and  servants,  224,  225 

Show,  the  sinecure  home,  97 

Simple  life,  and  the  cost  of  living, 
209 

Simple  life,  effect  of  neighbors 
on,  209;  possibilities  of,  215, 
216 

Smith,  M.  E.,  quoted,  142 

Social  education  and  the  home, 
239 


Social  education,  purpose  of,  228 
Social  emulation,  increasing  strug- 
gle, 101 
Social  snobbery,  forces  opposing, 

54 

Soil  fertility,  conservation  of,  253 
Specialization  and  labor  efficiency, 

263,  264 

Spending,  a  class  activity,  73 ;  as 
a  means  of  circulating  money, 
73;  definition  of,  73  ;  for  com- 
forts and  luxuries,  74 ;  or  pros- 
perity, 73;  to  "make  work," 
75»76 

Standard  of  living,  American,  34, 
35 ;  American  desire  to  excel, 
35  ;  increase  in  comforts  and 
luxuries,  67  ;  increase  of  neces- 
saries, 79;  influence  of  science 
advance  on,  35,  36;  in  the 
eighteenth  century,  85-87 ; 
pressure  of  civilization  on,  82 ; 
set  by  the  neighbors,  92,  93 ; 
tendency  to  rise,  36 ;  universal 
wants,  37 

Standard  of  value,  need  of,  136 
Standard  Oil  Company,  158,  159 
State,  evolution   of  the  modern, 

87 

Steam  vessels,  tonnage  of,  146 
Steel  Trust,  and  the  price  of  steel, 

1 60 
Substitution    of  resources,   effect 

on  prices,  250,  25 1 
Sugar  Trust,  and  price  of  sugar, 

'59 

TARIFF,  and  excessive  prices,  26 ; 
reduction  in,  25 

Tariff  Bill,  passage  of  by  Dem- 
ocratic party,  27,  28 

Taxation,  and  reduction  of  mon- 
opoly power,  289 ;  of  city 
land,  29 1 ;  of  farm  land,  292 ; 
of  mineral  land,  292 ;  object 
of,  293,  294;  readjustment  of. 


INDEX 


343 


289-294 ;  regulation  of  rent, 
291,  292;  of  timber  land,  292 

«'  Things "  as  an  object  of  en- 
deavor, 214 

Timber  land,  conservation  of,  251, 
252;  reforestation  and  elimina- 
tion of  waste,  252 

Timber  land  values,  phenomenal 
increase  in,  177,  178 

Timber  land,  taxation  of,  292 

Tobacco  Trust,  and  price  of 
tobacco,  1 60 

Trenton,  increase  in  land  value, 
191 

Trust,  definition  of,  158 

Trusts,  and  prices,  163 

UNITED  KINGDOM,  cost  of  gov- 
ernment in,  89,  90 

United  States,  increase  in  labor 
costs,  1866-1909,  195  ;  price  in- 
creases, 1890-1911,  no;  total 
farm  land  increases,  180 

VALUES,  Boston  land,  Appendix 
K;  Brooklyn  land,  Appendix 
K ;  Dallas  land,  Appendix  K ; 
Houston  land,  Appendix  K; 
land,  city,  Appendix  K ;  land, 
farm,  Appendix  J ;  Newark 
land,  Appendix  K;  Seattle 
land,  Appendix  K ;  Trenton 
land,  Appendix  K 

WAGES  and  prices,  New  Jersey, 
1898-1912,  Appendix  C 

Wages,  anthracite  coal  industry, 
197,  198;  increase  in  agricul- 
tural labor,  195 ;  increase  in 
and  cost  of  living,  200;  in- 


crease in  building  trades,  199 ; 
increase  in  manufacturing  in- 
dustries, 199;  increase  in  rail- 
road industry,  196;  of  farm 
labor,  Appendix  L 

Wants  and  income,  balance  of, 
212 

Wants,  control  of,  212;  persist- 
ence of,  213;  restriction  of, 
213 

Washington  Bureau  of  Labor, 
quoted,  1 12 

Washington  price  increases,  1900- 
1910,  1 10,  113 

Water  power,  government  devel- 
opment of,  255 

Water  resources,  and  the  elimi- 
nation of  monopoly,  254 

Water  resources,  conservation  of, 
254 

Well-to-do,  and  luxuries,  69 

Well-to-do,  and  the  servant  prob- 
lem, 58 

Western  farm  land  values,  ab- 
normal increase  in,  180 

Western  states,  increase  in  farm 
land  value  per  acre,  181 

Wholesale  prices,  1890-1912, 
price  index  United  States 
Bureau  of  Labor,  168 

Woodruff,  C.  E.,  quoted,  133 

Woolen  Trust,  increase  in  price 
of  clothing,  162 

Workingmen's  families,  expendi- 
tures of,  38,  39 

Work,  "  making  work "  argu- 
ment, 75 

World's  development,  statistics  of, 
146 

World   starvation,  possibility  of, 


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